Saturday, May 24, 2008

Saturday, May 24, 2008

RAISING THE LIMIT

'New loan waiver scheme not good enough'

Prafulla Marpakwar I TNN

Mumbai: Even as chief minister Vilasrao Deshmukh on Friday welcomed finance minister P Chidambaram's amended loan waiver scheme, farmers' leader Kishore Tiwari said that with the meagre financial assistance, the Centre would not be able to tackle the agrarian crisis in the backward Vidarbha region.On Friday, the Union cabinet removed the ceiling on land holding for farmers and provided a debt relief of 25% of the outstanding loan or Rs 20,000 whichever is higher. "We are awaiting written instructions from the Centre on the new loan waiver scheme. Once we get the same, we will be able to analyse the situation. Prima facie it appears that the amended scheme will certainly help tackle the agrarian crisis,'' Deshmukh told TOI on Friday.Soon after the Centre had declared the loan waiver scheme for farmers holding land up to 5 acres, Deshmukh had taken up the matter with Chidambaram saying that five acres of irrigated land may be equated with 15 acres of non-irrigated land or without changing the holding criteria, a monetary limit of Rs 50,000 for waiver of agricultural loan of all dry land farmers irrespective of land holding may be prescribed. Deshmukh had said that if such a decision was taken, it would benefit at least 90% of the farmers having nonirrigated agricultural holdings. However, Tiwari said the Centre should have accepted Deshmukh's plea in toto. "We are not happy with the decision. There should have been a complete loan waiver for farmers with up to 15 acres of land,'' Tiwari said. Tiwari, who had taken up the issue of farmers' suicides in six districts(I��(BAmravati, Wardha, Akola, Washim, Buldhana and Yeotmal(I��(Bof the backward Vidarbha region, said the farmers in the region had absolutely no money and even if the Centre was waiving 25% of the outstanding loan amount, the farmer was not in a position to repay the remaining amount. "Our demand was of a complete loan waiver, which has not been accepted by the Centre,'' Tiwari said. A senior Congress minister said that following the large number of suicides, PM Manmohan Singh visited the affected areas and asked his government to formulate a loan waiver scheme. "It was therefore expected that the Centre would draft the scheme keeping in mind the six districts of the Vidarbha region. However, when the scheme was presented before the Cabinet on Friday, there was nothing special for the Vidarbha region,'' the minister said. He added that even after the amendment of the scheme, out of 12 lakh farmers in distress in the six districts, less than five lakh farmers would be benefited. The total outstanding loan against the 12 lakh farmers is Rs 1333.42 crore.Meanwhile, a senior government official said it would take at least 15 days to work out the action plan for implementing the loan waiver scheme. "Earlier, the instructions were for loan waiver for farmers with up to five acres of land. Now the ceiling has been removed. In view of the revised instructions, the cooperative and nationalised banks will have to give the state government the status of outstanding loans against the farmers,'' the official said.----------------------------------------------------------------------------------------------------

"We have been demanding minimum food security, health care and rural employment or direct subsidy to distressed farmers to check the suicides but nobody is ready to even look at these demands," Mr. Tiwari said.

MUMBAI: Union Finance Minister P. Chidambaram's announcement of expanding the farmers' loan waiver from Rs. 60,000 crore to Rs. 71,000 crore will not help the three million suicide-prone cotton growers of Vidharbha and therefore, complete loan waiver is needed, the Vidharbha Jan Andolan Samiti has said.

The enhanced funding for the loan waiver would not work since the two hector cap and the cut of date had not been extended. The farmers who would not be covered by the loan waiver would continue to be in financial burden , Samiti leader Kishor Tiwari said in a statement on Friday.

"In fact there has been a sudden rise in farm suicides among the Vidharbha cotton growers after the loan waiver announcement, since majority of the farmers hold more than two hectors and hence their farm loans do not get written off," he said.

The Union government, he added, did not consider the Maharashtra government's proposal and Rahul Gandhi's suggestion of expanding the loan waiver to cover the dry-land farmers of Vidharbha and Andhra Pradesh.

He alleged that the government intentionally limited the scope so that the farm waiver could benefit prosperous farmers of Western Maharashtra. "We have been demanding minimum food security, health care and rural employment or direct subsidy to distressed farmers to check the suicides but nobody is ready to even look at these demands," Mr. Tiwari said.

He urged the UPA government to write off completely the cotton growers' debts, restore advance bonus and pay the price of Rs. 2,700 per quintal as promised in the UPA manifesto.

Enhancement of loan waiver package to Rs 71,000 crore is not going to help the farmers from the suicide stricken six cotton growing districts from Vidarbha as the move fails to meet the basic demand of the region's farmers that the qualifying area of landholdings should be increased from 2 hectares and the cut-off date for becoming eligible for the package be extended, said president of Vidarbha Jan Andolan Samiti (VJAS) Kishore Tiwari.

In a press release issued by VJIAS, Tiwari alleged that it was common knowledge that landholdings were bigger in dryland areas like Vidarbha and Bundelkhand. But despite many NGOs and political parties highlighting the need for increasing the limit of landholding for dryland areas, and even Congress President Sonia Gandhi and General Secretary Rahul Gandhi admitting the need for doing so, the government failed to take this much-needed step. "This clearly shows the bias of the whole system against the dryland farmers," he said.

He also alleged that "since farmers from Western Maharashtra, which is a stronghold of NCP president and Agriculture Minister Sharad Pawar, had benefited most from the package, Pawar is simply neglecting the plight of dry land farmers".

Demanding that cotton farmers from Vidarbha should be given complete loan waiver irrespective of their landholdings, Tiwari said that "as promised in the election manifesto by the Congress and NCP in 2004, the Democratic Front government in the state should immediately announce Rs 2,700 per quintal minimum support price (MSP) for cotton".

The state government should also immediately set up a regulatory mechanism to ensure farmers get quality seeds at affordable rates, so that they are not taken for a ride by the seed companies, the press release added.

Wednesday, May 21, 2008

The entire revenue from the final match of the Indian Premier League (IPL)-- to be played on June 1-- should be spent among the widows of the farmers, who had committed suicides in the Vidarbha region of Maharashtra, the Vidarbha Jan Andolan Samiti (VJAS), a voluntary organisation working among farmers in the region, demanded today.

The money should be used to educate the children of the dead farmers, help their aged parents and also used for the marriage of their daughters, VJAS said in a release here. Significantly, the IPL is being conducted under the aegis of the Board of Control for Cricket in India (BCCI), of which Union Agriculture Minister Sharad Pawar is the Chairman, it said.

Criticising the decision of the Maharashtra government to waive 25 per cent of the entertainment tax on the IPL matches, the VJAS said it would cause a revenue loss of Rs 100 million to the state exchequer. The money could have been utilised to help the distressed farmers and their families in Vidarbha, it said.

''The decision is shocking because IPL ties are professional matches, being conducted with millions of rupees from the corporate world. One of the team owners, Mukesh Ambani, is among the richest in the world. He had not asked for any concession in the tax. Yet, the government gave one,'' the release said.

The organisation would shortly move a petition before the Nagpur bench of the Bombay High Court demanding that the loss of revenue caused by the discount in entertainment tax be recovered from Chief Minister Vilasrao Deshmukh, it added.

now vidarbha agrarian reported 371th victim named as panjabrao deshmukh of village dhanora in amaravati adding more pain to this crisis as same amaravati district has given lateunion agriculture dr.panjabrao deshmukh who is founder bharat krishak samaj (B.K.S.) AND I.C.A.R. who has shown path of success to Indian agriculture after freedomnow his next generation of farmers are committing suicides due to poverty ,debt and food and health hardships informed kishor tiwari of vidarbha janandolan samiti (VJAS) today.

Along with this debt trap

1.PANJABRAO DESHMUKHIN AMARVATI six other farmers are

2.harichnadra kulejkar in bhandara

3.vasant bonde in wardha

4.mahadev jadhav in buldhana

5.sadashiv rathode in yavatmal

7.manik manohare in wardha

This has taken tally of farm suicides to371.

here is the monwise and district wise details of 371farm suicides of vidarbha in 2008.

MONTHS-2008

FARM SUICIDES

DISTRICT

Farm suicides

JAN

80

YAVATMAL

99

FEB.

86

AMARAVATI

90

MARCH

87

WASHIM

28

APRIL

89

BULDHANA

43

MAY

29

AKOLA

32

WARDHA

32

BHANDARA

13

NAGPUR

13

CHANDRAPUR

10

GADCHIROLI

2

GONDIA

9

TOTAL

371

371

VJAS DEMANDSMOST NEEDED RELIEF TO DYING FARMERS

Vidarbha jan andolan samiti (VJAS) has once again asked demandedthat PMO sould give to serious importance to vidarbha agrarian crisis as recently tabled CAG report on farmers relief package worth Rs.5000 crore and survey of ground reality which adding further fuel to on going mass genocide of vidarbha farmers and requested totake remedial measures such provided food security and health care to identifiedmore than million of distressed farmers as per administration survey to stop on going farm suicides in vidarbha ,kishor tiwari added.

It has been earlier reported that .

Net result Relief Package as per CAG report

CAG certified that the money did not help mitigate the gargantuan agrarian crisis or evenreduce farmers' suicides."Farmers' suicides shot up dramatically even when the two packages were in vogue," says the report, which was tabled before the statelegislature on April 27, just hours before the end of its budgetsession.One of the important deficiencies of the packages, as the CAG foundout, was the fact that they did not improve agricultural prices.In its observation, the implementation of recommendations of the FactFinding Committee (of Planning Commission of India) could have helped in reduction of farmers' distress and the consequent suicides.The committee had recommended in March 2006, shortly after its visitsto the region, that the minimum support price for agriculture cropsshould carry appropriate variation for the region so that it reflectedthe actual input cost and was not an estimated figure.Despite this, the CAG observes, the MSP for the four major crops ofthe region declared by the Government of India during the years2003-06 was 29-38 per cent less than the MSPs proposed by the stateagriculture price committee (SAPC) of Maharashtra Government. During2006-07, the MSP was 31 to 40 per cent less than that proposed by theSAPC.

as per CAG report now it clear that GOVT. failed on relief work front more over lost of corruption and malpractices have been observed in CAG surveybut at cost and credit front administration just forced more distress farmers to commit suicides by exploiting more and more .CAG report is nothing butwarning to the Indian govt.regarding mass farm suicides due accumulated distress in more than million cotton farmers of vidarbha,kishor tiwari informed

NON-PROFESSIONAL APPROACH TO ADDRESS THE ISSUE

Our distress report analysis and relief work delay has been just reproduced 1.4.34 lacs distress class A farmers were not given serious attention and not single G.R. was issued for utilization of rs.3750 crore and every scheme was madeon paper will of concern deptt. And collector and Banks were free act to exploit the dying farmers , the CAG report found that the nationalized and cooperative banks not only levied interest more than the principle amount to the tune of Rs 29 crore, but also wrongly claimed it in waiver of effected six district in west vidarbha.

BANK LOOT

For instance, the seven branches of district central cooperative (DCC)bank test-checked by the surveyors had levied an interest of Rs 5.13crore as against principal of Rs 3.19crore, resulting in excess claimof Rs 1.94 crore.The CAG found that the DCC banks and rural cooperative societies charged an interest at the rate of 17 per cent per annum instead of 14 in over four lakh accounts involving principal amount of Rs 514.64 crore. This resulted in excess claim of interest at threeper cent per annum. The penal interest of three per cent per annum works out to Rs 15.44 crore, it says. reportsays farmers did not benefit from interestwaiver. For, their incomes did not augment in any way.The PM package had waived interest on all agricultural loansoverdue as on June 2006 and reschedule the loans.Banks claimed a total interest waiver of Rs 824.99 crore, with the state's share being Rs 356 crore.However, as the CAG report says, the banks extended crop loans to only 4.84 lakh farmers out of a total 17.64-lakh farmers in the six most affected districts. So only about 35 per cent farmers got institutional credit, when the proposal was to reschedule the loans of 9.29 lakh cases (about 60 per cent), which had an outstanding principal amount of Rs 1369.85 crore.The CAG says fresh crop loan disbursement actually dipped to 637.88crore in 2007 from Rs 9.29 crore in 2006, when the PM, Dr ManmohanSingh, announced the package in Nagpur.The CAG report about crop loan disbursement after relief package that it decline in the number offresh loan cases that 1,92,745 borrowers were landless farm workerswho did not require any crop loan, 26,400 borrowers had died, 25,129 farmers had sold their land (in that year), 21,125 had left villagesand 30,715 did not require any loan. The 62,807 cases were marred by disputes of lack of essential documents while in 85,975 cases the farmers had long-term loans.The CAG has objected to the fact that the government should not have waived the interest on the loans outstanding on the nearly two-lakh landless labourers.the CAG report states that the government's ban on illegal money lending did not stand before the high court.FAILED TO MANAGED TO DISTRESS LEVEL OF DYING FARMERS OF WEST VIDARBHA

please look at the CAG's evaluation, it says"the possibility that agrarian distressessentially caused by un-remunerative agriculture would start risingagain in the closing years of the package (2008-09)." It warns thatdistress could increase significantly after the expiry of themoratorium on loan recovery. now CAG has officially confirmed that not onlythe chief minister and prime minister in 2005 and 2006 have flopped but has raised serious issue of

THE RETURN ON INVESTMENT(ROI)

The return on investment(RoI) of a typical cotton farmer, the CAG found, was a shocking minus two per cent before the implementation of packages. Which meant a farmer was in losses the day he went for sowing of seeds. It shot up to seven per cent in the first year of the package, and then dwindled to five per cent in the second and two per cent in thethird year.

CAG REPORT – GOVT.FAILED TO ADRESS IRIGATION ISSUE

THE CAG report finds a serious problem with the micro-irrigation andassured irrigation projects worth over Rs 2300 crore in the packages.The PM package has a component of Rs 2177 crore to create irrigation potential for 1.6 lakh hectares in six suicide-prone districts. Of this, Rs 2085.38 crore was to fund eight major, nine medium and 65minor irrigation projects as grant from the Centre.However, the Government of India revised in December 2006 the eligibility criteria for funding. According to the revised criteria,if the state government fails to comply with the agreed date of completion, the amount released would be treated as loan and recoveredas per usual terms of central loan recovery.The CAG report states that the possibility of completion of projects within the stipulated time is remote. "This presents the risk of Rs2085.38 crore (or 56 per cent of total package amount) becoming loan instead of grant."As the CAG's performance audit of farmers' packages finds that notonly were the packages tardy in implementation, but also mindless inconceptualization and "inconsistent with local needs."

as per CAG report now it clear that GOVT. failed on relief work front more over lost of corruption and malpractices have been observed in CAG surveybut at cost and credit front administration just forced more distress farmers to commit suicides by exploiting more and more .CAG report is nothing butwarning to the Indian govt.regarding mass farm suicides due accumulated distress in more than million cotton farmers of vidarbha.

RAISING THE LIMIT

'New loan waiver scheme not good enough'

Prafulla Marpakwar I TNN

Mumbai: Even as chief minister Vilasrao Deshmukh on Friday welcomed finance minister P Chidambaram's amended loan waiver scheme, farmers' leader Kishore Tiwari said that with the meagre financial assistance, the Centre would not be able to tackle the agrarian crisis in the backward Vidarbha region. On Friday, the Union cabinet removed the ceiling on land holding for farmers and provided a debt relief of 25% of the outstanding loan or Rs 20,000 whichever is higher. "We are awaiting written instructions from the Centre on the new loan waiver scheme. Once we get the same, we will be able to analyse the situation. Prima facie it appears that the amended scheme will certainly help tackle the agrarian crisis,'' Deshmukh told TOI on Friday. Soon after the Centre had declared the loan waiver scheme for farmers holding land up to 5 acres, Deshmukh had taken up the matter with Chidambaram saying that five acres of irrigated land may be equated with 15 acres of non-irrigated land or without changing the holding criteria, a monetary limit of Rs 50,000 for waiver of agricultural loan of all dry land farmers irrespective of land holding may be prescribed. Deshmukh had said that if such a decision was taken, it would benefit at least 90% of the farmers having nonirrigated agricultural holdings. However, Tiwari said the Centre should have accepted Deshmukh's plea in toto. "We are not happy with the decision. There should have been a complete loan waiver for farmers with up to 15 acres of land,'' Tiwari said. Tiwari, who had taken up the issue of farmers' suicides in six districts(I��(BAmravati, Wardha, Akola, Washim, Buldhana and Yeotmal(I��(Bof the backward Vidarbha region, said the farmers in the region had absolutely no money and even if the Centre was waiving 25% of the outstanding loan amount, the farmer was not in a position to repay the remaining amount. "Our demand was of a complete loan waiver, which has not been accepted by the Centre,'' Tiwari said. A senior Congress minister said that following the large number of suicides, PM Manmohan Singh visited the affected areas and asked his government to formulate a loan waiver scheme. "It was therefore expected that the Centre would draft the scheme keeping in mind the six districts of the Vidarbha region. However, when the scheme was presented before the Cabinet on Friday, there was nothing special for the Vidarbha region,'' the minister said. He added that even after the amendment of the scheme, out of 12 lakh farmers in distress in the six districts, less than five lakh farmers would be benefited. The total outstanding loan against the 12 lakh farmers is Rs 1333.42 crore. Meanwhile, a senior government official said it would take at least 15 days to work out the action plan for implementing the loan waiver scheme. "Earlier, the instructions were for loan waiver for farmers with up to five acres of land. Now the ceiling has been removed. In view of the revised instructions, the cooperative and nationalised banks will have to give the state government the status of outstanding loans against the farmers,'' the official said.----------------------------------------------------------------------------------------------------

"We have been demanding minimum food security, health care and rural employment or direct subsidy to distressed farmers to check the suicides but nobody is ready to even look at these demands," Mr. Tiwari said.

MUMBAI: Union Finance Minister P. Chidambaram's announcement of expanding the farmers' loan waiver from Rs. 60,000 crore to Rs. 71,000 crore will not help the three million suicide-prone cotton growers of Vidharbha and therefore, complete loan waiver is needed, the Vidharbha Jan Andolan Samiti has said.

The enhanced funding for the loan waiver would not work since the two hector cap and the cut of date had not been extended. The farmers who would not be covered by the loan waiver would continue to be in financial burden , Samiti leader Kishor Tiwari said in a statement on Friday.

"In fact there has been a sudden rise in farm suicides among the Vidharbha cotton growers after the loan waiver announcement, since majority of the farmers hold more than two hectors and hence their farm loans do not get written off," he said.

The Union government, he added, did not consider the Maharashtra government's proposal and Rahul Gandhi's suggestion of expanding the loan waiver to cover the dry-land farmers of Vidharbha and Andhra Pradesh.

He alleged that the government intentionally limited the scope so that the farm waiver could benefit prosperous farmers of Western Maharashtra. "We have been demanding minimum food security, health care and rural employment or direct subsidy to distressed farmers to check the suicides but nobody is ready to even look at these demands," Mr. Tiwari said.

He urged the UPA government to write off completely the cotton growers' debts, restore advance bonus and pay the price of Rs. 2,700 per quintal as promised in the UPA manifesto.

Enhancement of loan waiver package to Rs 71,000 crore is not going to help the farmers from the suicide stricken six cotton growing districts from Vidarbha as the move fails to meet the basic demand of the region's farmers that the qualifying area of landholdings should be increased from 2 hectares and the cut-off date for becoming eligible for the package be extended, said president of Vidarbha Jan Andolan Samiti (VJAS) Kishore Tiwari.

In a press release issued by VJIAS, Tiwari alleged that it was common knowledge that landholdings were bigger in dryland areas like Vidarbha and Bundelkhand. But despite many NGOs and political parties highlighting the need for increasing the limit of landholding for dryland areas, and even Congress President Sonia Gandhi and General Secretary Rahul Gandhi admitting the need for doing so, the government failed to take this much-needed step. "This clearly shows the bias of the whole system against the dryland farmers," he said.

He also alleged that "since farmers from Western Maharashtra, which is a stronghold of NCP president and Agriculture Minister Sharad Pawar, had benefited most from the package, Pawar is simply neglecting the plight of dry land farmers".

Demanding that cotton farmers from Vidarbha should be given complete loan waiver irrespective of their landholdings, Tiwari said that "as promised in the election manifesto by the Congress and NCP in 2004, the Democratic Front government in the state should immediately announce Rs 2,700 per quintal minimum support price (MSP) for cotton".

The state government should also immediately set up a regulatory mechanism to ensure farmers get quality seeds at affordable rates, so that they are not taken for a ride by the seed companies, the press release added.

Sunday, May 18, 2008

An overwhelming majority of Vidharbha’s farmers do not gain from the farm loan waiver because they are too “big.” But the IPL waiver goes to some of India’s richest millionaires and billionaires. They aren’t too big.

In Maharashtra, where the nation’s most distressed farmers have been denied the benefit of the ‘farm loan waiver,’ the government is said to waive crores in entertainment tax that the Indian Premier League cricket matches would normally attract. Media reports in Mumbai on this score reckon that means a loss of up to Rs.10 crore in revenue. As even the pro-corporate newspapers of the city point out, the direct beneficiaries would be Mumbai’s millionaires and billionaires. Film stars and corporate bosses who did not find it difficult to spend crores on buying teams and players. That too, for what the media are fond of calling “the world’s richest cricket tournament.” Simply put, if it goes through, they’ll be getting tax waivers on the hiring of cheerleaders, among other things.

True, this is not the first time that entertainment tax has been waived on cricket matches in Mumbai or elsewhere. The BCCI and its affiliates have always enjoyed political patronage. The difference, which has got even members of the ruling front worked up, is that those raking in the crores in exemptions are for-profit-only groups and individuals. By law, any event, musical or cultural, performance or other, staged for profit must pay entertainment tax. But not the IPL, which will have held 10 matches in Mumbai including the Final.

It’s an odd situation. The overwhelming majority of Vidharbha’s farmers do not gain from the farm loan waiver — because they are too “big.” That is, they hold more than two hectares of land. But the IPL waiver goes to some of India’s richest millionaires and billionaires. They aren’t too big. And the only reason Vidharbha’s farmers have holdings that exceed the loan waiver’s two-hectare cut-off is because they are dry-land farmers. Their fields are poor, un-irrigated and less productive.

The IPL waiver reports come within three weeks of the Comptroller and Auditor General’s report on “Farmer’s Packages” in the State. A performance audit the government of Maharashtra chose to present to the Assembly on April 27, the last day of the session. A day on which, as MLAs say, “there isn’t enough time to count the pages, let alone read the many documents they push at that time.” Clearly, they were not eager on a discussion of the contents.

The very first page of the CAG report tells us why. Despite the State government’s Rs.1075-crore “package” for farmers “the suicides, however, continued unabated and the number increased to 1414 during 2006-07.” The Prime Minister’s visit in mid-2006 and the Centre’s Rs.3750-crore package that followed in July also came the year the suicides increased. As we know from earlier reports, including some in this newspaper, they actually went up in the second half of that year.

Erratic spending

Here is the CAG on the official response: “No evaluation of the implementation of the packages, in terms of reduction in agrarian distress, was made.” We also learn that tens of crores of rupees aimed at reducing farmer distress were, in fact, never spent. The value of the packages themselves was exaggerated by over Rs.200 crore. Crores were released under some heads with no reference at all to the actual requirement of funds.

Other funds, such as those meant “for increase in production,” were released late. Cheques given to some ‘beneficiaries’ “were dishonoured for want of cash in the bank.” The “self-help groups were paid subsidies in excess of admissible norms.” Parts of other funds were not released at all. In head after head, funds were underutilised. This is how lackadaisical the governments were with packages worth a total of Rs.4,825 crore. So what’s Rs.10 crore for the IPL?

But the CAG report, which is devastating from start to finish, does not stop at that. It has a clear premonition of things to come. On the “interest waiver” that followed the Prime Minister’s visit, it says: “While reimbursing banks for interest waived on loans, sanction of fresh loans was not ensured.”

That is exactly where most farmers now find themselves again after the “massive farm loan waiver.” Fresh credit is very hard to come by. Distress has not come down. There have been over 360 farm suicides since January this year, about 200 of them post-loan waiver. In the official count, there were 153 in January and February. And of these, only 18 were considered “eligible suicides.” That is, only 18 families had any hope of being compensated for losing a breadwinner. The figures for March and April will turn out to be much worse.

There was a hope, after Rahul Gandhi’s plea in Parliament, that the two-hectare cut-off point would not be imposed on dry-land farmers in places such as Vidharbha and Anantapur. But it was. The very places whose misery had sparked the idea of a loan waiver now stand mostly excluded from it.

There is a very important point the CAG report brings out that tends to get glossed over most of the time. That the farmer’s world is not driven by agriculture alone. Farmers, whose incomes have been plummeting, have been hammered by education and health costs. The commercialisation of those sectors has hurt them, as it has countless millions of other Indians, very badly. That is on top of the stick they’ve taken in agriculture.

“Distress amongst farmers on account of cost of education was not measured.” The “allocation of funds (Rs.3 crore at Rs.50 lakh per district) for health was meagre ...” It mentions the government’s own survey showing that the health issues were huge and required much larger action.

One of the most important things the CAG points to is the State government evading its own findings. In mid-2006, the government organised what was the biggest door-to-door survey of farm households ever done. It covered over 17 lakh households, that is, all farming households in the six “crisis districts” of Washim, Akola, Yavatmal, Buldhana, Wardha and Amravati. Over a fourth of those families — that is, more than two million people — were found to be in “maximum distress.” And more than three quarters of the rest were in what the report called medium distress.

In other words, close to seven million people were in distress in just six districts. That was the finding of the most massive study, powered by over 10,000 field workers. And a report of the State government itself, at that. (See: The Hindu, November 22, 2006)

Yet, says the CAG, “the selection of beneficiaries … had no relation to the departmental survey conducted for the assessment of distress. As a result, the prioritisation of relief and rehabilitation works considering the distress level of farmers could not be ensured.” Why did the State government ignore its own study? Because the results of that huge survey are, to this day, explosive. Also, de-linking the distress survey from the packages meant you could reward your friends who might never have been in crisis.

Catalogue of failure

One line recurs in different ways through the CAG report: “Authenticity of reported expenditure was doubtful in the absence of proper classification of accounts.” Throughout, the report is a catalogue of failure too serious to be written off as “error.” On inputs, which farmers were desperate to get at reasonable prices, there was poor assistance. Farmers were hit hard by a poor supply of seed when they needed it most. Seed requirements for several crops, suggests the CAG, were simply not taken seriously. “The estimates were not realistic as these were made based on the amount allocated to this component and not based on actual requirement.”

The CAG report captures at the top end, the state of things on the ground. Being a performance audit, it confines itself to that task. It is not a field report. However, the portrait it presents of the government’s performance is a sharply accurate one. A picture that sits perfectly with the chaos at the receiving end below.

In the end, this is more than just a report. It is a snapshot, or a series of snapshots, of how governments, particularly the one in Maharashtra, are responding to agrarian distress. The complete apathy, the corruption, the cover-ups, even the contempt for the farmer, that come across. This is a State where all the attention is on the brilliantly-lit, power-guzzling matches of the IPL. It is also a State where many regions face power cuts ranging from 3-16 hours each day. And countless children have completed their examinations without being able to study much. The huge power cuts meant darkness in their homes when they returned from school.

The report is about the packages in this State. But if we extend our thinking a bit, it should lead us to reflect on things much larger. On the crisis in the countryside, on those being marginalised or just driven away. On regions beyond this one and on our attitude towards those who grow our food but can less and less afford to eat it themselves.

Friday, May 16, 2008

CHAPTER I: INTRODUCTION1.1 The PackagesThe sharp increase in the number of suicides in six districts of the VidarbhaRegion from 146 in 2003-04 to 455 in 2004-05 led the Government ofMaharashtra (GOM) to announce a package called ‘Special Package forfarmers’ earmarking Rs 1075 crore in December 2005. The suicides, however,continued unabated and the number increased to 1414 during 2006-07.(Courtesy: Dainik Bhaskar, a Nagpur daily)Government of India (GOI) also declared (July 2006) a package called‘Special Rehabilitation Package’ to mitigate the distress of farmers in31 districts in four States, of which six districts were in the Vidarbha Regionof Maharashtra. The package involved Rs 3750 crore, to be spent over threeyears. The packages included long term and short term relief measures foralleviating rural distress and preventing farmers’ suicides in the six mostsuicide prone districts of Vidarbha viz. Amravati, Akola, Buldana, Wardha,Washim and Yavatmal.These packages consist of various components like rescheduling of loan/debtrelief to farmers, seed replacement, assured irrigation facilities, financialassistance to farmers for increase in production, community marriages,immediate relief to the family of the deceased, ex-gratia assistance foreducation and medical needs from the Prime Minister’s National Relief FundAudit Report (Farmers’ packages) for the year ended 31 March 20072(PMNRF), etc. Details of the various components of the packages are inAppendix I (Page 33).1.2 Organisational set-upPrincipal Secretary, Relief and Rehabilitation (R & R) wing of Revenue andForests Department was responsible for extending relief measures to thefarmers in distress. Director General, Vasantrao Naik Sheti SwawalambanMission (VNSSM), Amravati was to monitor the relief measures taken upunder the packages. Director General was assisted by the Collectors at districtlevel. Various components of the packages were implemented through seven1departments as detailed in Appendix II (Page 34).1.3 Audit objectivesThe performance audit of ‘Farmers’ Packages’ was conducted with a focus onfour principal themes viz. assessment and handling of agrarian distress,immediate (short term) relief measures, long term measures for incomeaugmentation and monitoring, reporting and the impact.The main Audit objectives were to examine and assess whether:􀂾 the assessment of agrarian distress was adequate and allocation of fundwas realistic,􀂾 the institutional mechanism for grant of relief was efficient andeffective,􀂾 relief provided to farmers improved their financial status and reducedthe distress,􀂾 appropriate monitoring and reporting mechanism was in place1.4 Audit criteriaThe Audit criteria adopted in this performance audit were:􀂾 Reports of the Indira Gandhi Institute of Development Research, TataInstitute of Social Sciences (IGIDR/TISS) and the Fact FindingCommittee,􀂾 Survey reports of distressed farmers and other related data availablewith the Government/Departments,1 (i) Agriculture, (ii) Animal Husbandry and Dairy Development, (iii) Co-operation,(iv) Relief & Rehabilitation, (v) Water Conservation (vi) Water Resources and (vii) Women &Child WelfareChapter I - The packages3􀂾 Instructions/guidelines issued by Relief and RehabilitationDepartment, the line departments and National Bank for Agricultureand Rural Development (NABARD),􀂾 Rules and Orders for effective utilisation and proper accounting of thefunds allotted under the packages.1.5 Scope and methodology of auditThe performance audit was conducted (March to June 2007) by test check ofrecords in the Relief and Rehabilitation wing, Departments of Agriculture,Animal Husbandry, Dairy Development and Fisheries (AHDD&F),Co-operation, Women and Child Development, Water Resources, DirectorGeneral (DG), VNSSM, Amravati, six District Collectors, six District DeputyRegistrars of Co-operative Societies (DDRCS), six District Women and ChildDevelopment Officers, 18 (out of 64) Tahsils and Taluka Agriculture Officers(TAOs), 34 branches of District Central Co-operative Banks (DCC Banks) and36 branches of Nationalised banks and Cotton Federation including theirZonal Offices.(Six suicide prone districts of Vidarbha region of Maharashtra State)The talukas were selected using stratified random sampling technique.Expenditure of Rs 1383.46 crore (63 per cent), out of Rs 2189.30 croreincurred on various components as of March 2007 was covered under theperformance audit (Appendix III and IV - Page 35 and 36).Audit Report (Farmers’ packages) for the year ended 31 March 20074Empirical Research Agency (ERA) Private Limited, Gomukh Trust, Pune wasengaged for conducting survey of the land holders (October-November 2007)in eleven selected talukas of the six suicide prone districts of VidarbhaRegion. For this survey, the land holders were selected (Appendix V –Page 37) after stratifying them into following three strata (i) land holding lessthan two hectares, (ii) land holding between two to six hectares and (iii) landholding more than six hectares. A questionnaire about awareness of thepackage and benefits of the package was designed (September 2007) for thissurvey. Survey results are incorporated in the report at the appropriate places.The results have also been shared with GOM. Executive summary of the ERAreport is at Appendix VI (Page 38).The audit objectives, audit criteria, the scope and methodology of audit werediscussed in a meeting held on 12 February 2007 with the Principal Secretary,Relief and Rehabilitation wing wherein the Director General, VNSSM,Amravati, Commissioner of Agriculture, Pune and officers from Co-operation,Animal Husbandry, Dairy Development, Water Conservation and WaterResources Department were present. Exit conference was held between 20 and23 November 2007 and audit observations were discussed with the ChiefSecretary of the State and Principal Secretaries/ Secretaries of the linedepartments. Replies received from GOM before, during and after the exitconference along with certain inputs received from GOI have beenincorporated at appropriate places in the Report.1.6 AcknowledgementThe office of the Accountant General (Audit-II), Maharashtra, Nagpuracknowledges the cooperation of the Relief and Rehabilitation wing and otherDepartments during the performance audit of the ‘Farmers’ Packages’. Theinputs received from the senior officers of the Departments and the responsesto the audit observations helped in formulating the audit conclusion.====================================CHAPTER II: CONCEPTUALISATION OF PACKAGES2.1 FundingThe package declared by GOM was for Rs 1075 crore and the GOI declared apackage of Rs 3750 crore. The components of the GOI package are to beimplemented in three years. Four components of the GOM package(allocation: Rs 564 crore) were also available beyond the six suicide pronedistricts. In the six districts Rs 1010.90 crore was released of whichRs 895.64 crore was spent upto March 2007, as reported by VNSSM(Appendix III – Page 35). In the GOI package, three components (allocation:Rs 306 crore) are also available beyond the six suicide prone districts.Expenditure under seven components of the GOI package was to be shared (atdifferent ratios) by the State Government. In the six districts, Rs 1632.58 crorewas released (State share released: Rs 1306.62) of which Rs 1532.78 crorewas spent as of March 2007, as reported by VNSSM (Appendix VII –Page 41). Information regarding total amount released out of the packages forthe entire State and the total expenditure incurred for the entire State thoughcalled for was not furnished. Expenditure figures reported by the Departmentsonly have been considered for formulating observations in this Report.The expenditure on the component ‘interest waiver’ of the GOI package wasto be borne by the Central and State Governments in a ratio of 50:50.However, entire amount of Rs 712 crore was included in the total amount(Rs 3750 crore) of declared GOI package. As Rs 239 crore had already beenspent out of the State’s share as a part of GOM package, GOI package wasoverstated to that extent.2.2 Components found deficient / uncovered areasScrutiny of the GOM and GOI packages disclosed that some of thecomponents of the package were deficient/ did not cover some areas critical toachieve the objective of reducing the farmers’ distress, as detailed below:Name of component andpurposeDeficiencies/ Observations‘Prime Minister’sNational Relief Fund(PMNRF)’ in order toprovide financialassistance for Health andEducation. (GOI)Distress amongst farmers on account of cost of educationwas not measured. Besides, allocation of funds (Rs 3 croreat Rs 50 lakh per district) for health was meager ascompared to 92,456 cases of chronic illness noticed duringthe survey conducted (June 2006) by the RevenueDepartment in the six districts.Principal Secretary, R&R stated (November 2007) that theallocation of Rs 50 lakh per district was made on ad-hocbasis.GOI Packagewas overstatedbyRs 239 croreAudit Report (Farmers’ packages) for the year ended 31 March 20076‘Assistance to farmers’for increase inagriculture production.(GOM)(i) The component covered only 60,000 farmers on ad-hocbasis (less than 5 per cent) out of 13.48 lakh farmers indistress identified through departmental survey. PrincipalSecretary, Agriculture stated (November 2007) that60,000 farmers were targeted on ad-hoc basis.(ii) The Fact Finding Committee (FFC) of the PlanningCommission recommended in March 2006 that theminimum support price for agricultural crops should carryappropriate variation for the region so that it reflected theactual input cost and was not an estimated figure. Despitethis, the Minimum Support Prices (MSP) for four majorcrops of the region declared by GOI during the years2003-06 was 29 to 38 per cent less than the MSPsproposed by the State Agriculture Price Committee(SAPC) of the GOM during the period. During 2006-07,the MSP declared by GOI was 31 to 40 per cent less thanthe MSP proposed by the SAPC.Implementation of the recommendation of the FFC couldhave helped in reduction of farmers’ distress and theconsequent suicides. However, this was not included inthe package.Long term measures viz.supply of inputs andimplements, milchanimals and providingmicro irrigation systemat subsidized rates forincome augmentation.(GOI and GOM)These components were included in the package withoutassessing the financial constraints of the farmers. Whilesome components envisaged contribution by farmer upto amaximum of Rs 28,924, for the other components poverty(annual income not exceeding Rs 20,000) was one of theeligibility criteria.Principal Secretary, Agriculture stated that GOM’sproposal for reduction in farmers’ share was not acceptedby GOI.Micro irrigation forhorticulture cropssubsidyfor dripirrigation set. (GOI)The component was included in the package withoutchanging the guidelines for non-horticulture crops.Principal Secretary, Agriculture accepted the facts andagreed to issue comprehensive specific guidelines for nonhorticulturecrops.Concession inagriculture Insurancepremia to protect thefarmers from the loss ofcrops due to naturalcalamities or otherreasons. (GOI)Even though orange is the major horticulture crop in thesix suicide prone districts of Vidarbha region and everyyear orange crop was damaged due to untimely heavyrains or hail storms, orange was not considered for cropinsurance coverage by the Government. As such small andmarginal farmers could not get the benefit of the scheme.Principal Secretary, Agriculture agreed (November 2007)to refer the matter to GOI for considering the orange cropfor insurance coverage.For four components i.e. ‘ban on illegal money lending’, ‘agro basedindustries’, ‘joint farming of cotton’ and ‘helpline for farmers’ of the GOMpackage no fund allocation was made, not even for their publicity.Chapter II – Conceptualisation of packages7In the survey commissioned by Audit it was observed that 75 per centrespondents were not aware about the relief from illegal money lenders and82 per cent respondents were not aware about the helpline for farmers.2.3 Base line data not used for package implementationIn order to ascertain the level of distress amongst the farmers and to initiatepreventive measures to check farmers’ suicides, a comprehensive door to doorsurvey of 17.64 lakh farmers was conducted (June 2006) by teams consistingof Talathi, Gram Sevaks and Agriculture Assistants. The survey identified13.48 lakh farmers under distress and 4.34 lakh farmers were categorisedunder category of maximum distress, on the basis of demand for agricultureinputs, loan, etc. However, the list of such farmers in distress was neithershared with nor insisted upon as base line data by the implementing agencies(Agriculture, Animal Husbandry and Dairy Development Departments).Implementing agencies for various components selected beneficiaries on thebasis of applications invited by them.Selection of beneficiaries thus had no relation to the departmental surveyconducted for assessment of distress. As a result, prioritisation of relief andrehabilitation works considering the distress level of the farmers could not beensured.The Chief Secretary accepted (November 2007) that the survey data shouldhave been used in deciding the priorities in disbursement of assistance anddirected the Director General, VNSSM, Amravati to issue appropriateinstructions in this regard.ERA survey indicated that 85 per cent respondents were not approached byany Government official for departmental survey.2.4 Incorrect accounting of expenditureNo separate scheme/sub-head/object head was opened by the State in itsbudget for providing funds and incurring expenditure inspite of specificrequest made (February 2007) by the Accountant General. (A&E)-II,Maharashtra, Nagpur. As a result, consolidated expenditure could not be easilycorrelated with the actual amount booked in the State’s accounts. A totalamount of Rs 2275.30 crore was booked as expenditure in the State’s accountfor the Capital Formation Fund (CFF) paid during 2005-07, whereas actualexpenditure shown by Cotton Federation the implementing agency for refundof capital formation fund during the period was Rs 875.53 crore.The Principal Secretary, Co-operation accepted (November 2007) thedifference in the figures of expenditure reflected in the AppropriationAccounts and the figures reported by the Director General, VNSSM,Amravati. The Secretaries/Principal Secretaries of the line departments alsoagreed (November 2007) to furnish the details of amount actually drawn andSurvey reportindicated that85 per centfarmers werenotapproached byGovernmentofficialsAudit Report (Farmers’ packages) for the year ended 31 March 20078expenditure actually incurred as of March 2006 and March 2007, which wasnot received as of January 2007.The amount of expenditure furnished by VNSSM, Amravati in May/June 2007and November 2007 and the implementing departments differed in thefollowing components.(Rupees in crore)Sr.No.Name of component Expenditure as ofMarch 2007reported by VNSSMin the month ofExpenditure as of March 2007 asreported by the implementingagency in the month ofMay 2007 June 2007 November 20071 Compensation tocotton growers130.43 129.46 130.122 Assured irrigation 613.70 569.92 617.623 Organic farming 9.15 9.89 9.594 Vidarbha PanlotMission17.04 16.51 17.63Thus, there were differences in the figures of expenditure in four componentswhich have not been reconciled by VNSSM even after a lapse of eight months.The expenditure reported for Appropriation Accounts in respect ofcompensation to cotton growers as booked in accounts was Rs 122.18 crore(March 2007). The Principal Secretaries of the respective departments agreedto verify the figures.A few instances of discrepancies in reporting expenditure figures are as under:􀂾 The VNSSM reported expenditure of Rs 9.22 crore against Rs 6 croredeclared for community marriage, whereas expenditure reported forAppropriation Accounts was Rs 9.74 crore. Commissioner of Womenand Child Welfare, Pune stated (May 2007) the same to be ofRs 12.78 crore, six DWCDOs reported Rs 11.86 crore. Thus, there waslack of accuracy in reporting expenditure figures.􀂾 In three districts (Amravati, Wardha and Yavatmal) out ofRs 6.69 crore received upto March 2007, Rs 3.14 crore was utilised. Ofthe balance, Rs 2.29 crore was deposited in 8443 –Civil Deposits andwas lying idle. The expenditure was thus inflated by Rs 2.29 crore.Secretary, Women and Child Welfare stated (November 2007) the funds forcommunity marriage were kept in Civil Deposits as per instructions ofCollector. Reply indicated that the amount was withdrawn to avoid lapse ofgrant, without assessing the actual requirement of funds and there was noproper reporting of expenditure.􀂾 Further, out of Rs 16.36 crore released by GOI for subsidiary incomecomponent during 2006-07, Maharashtra Livestock DevelopmentBoard (MLDB) utilised Rs 4.44 crore (27 per cent). Out ofRs 14.53 crore released by GOM utilisation was Rs 9.73 crore (67 perExpenditurewas inflated byRs 2.29 croreChapter II – Conceptualisation of packages9cent). Unspent amount of Rs 4.80 crore was thus lying with MLDB asof December 2007.2.5 Contradiction of norms of GOM and GOIDCC Banks and Rural Co-operative Societies attached to the DCC Banks insix DDRCS charged interest at 17 per cent per annum instead of 14 per cent infour lakh accounts of farmers involving principal amount of Rs 514.64 crore,resulting in excess claim of interest at three per cent per annum. Exact amountof penal interest included in the claim was not readily available with thebanks. However, penal interest at three per cent for a year works out toRs 15.44 crore.Principal Secretary, Co-operation stated (November 2007) that as per the GOIpackage, interest on over due loan was the entire interest including penalinterest; hence banks were allowed to reimburse the amount of penal interestalso.The reply was not tenable as the GOM clarified (February 2006) that penalinterest charged by the Banks on outstanding loans would not be consideredfor waiver of interest. It would be appropriate that contradiction of ordersissued by the GOM and GOI may be resolved and a common view taken inthis matter.2.6 Programmes not consistent with local needsFor feed and fodder supply and establishment of fodder block units,Rs 6.12 crore was received (October – December 2006) from GOI under thecomponent ‘subsidiary income’. The amount remained unutilized as of March2007. Similarly, GOM issued (May 2006) instructions for purchase of twomobile vans for each district to provide medical assistance to the animalsunder the GOM package component ‘Agriculture allied activities’. Mobilevans were not purchased in any of the six districts.The Secretary, AHDD & F stated (November 2007) that establishment offodder block units was unviable and GOI have already approved the alternatefeed concentrate and though providing mobile van was envisaged in thepackage, the same were not required during implementation of the component.This clearly indicates inclusion of components without assessing local needs.2.7 ConclusionComponents had certain deficiencies and left critical areas uncovered whichimpacted their effectiveness. Seven components included in the packages wereavailable for the entire State. GOI Packages declared were overstated to theextent of Rs 239 crore. Base line data was not used for packageimplementation. Authenticity of reported expenditure was doubtful in theabsence of proper classification in accounts. VNSSM, the monitoring agencyPenal interestcharged by theDCC banks asper norms ofGOI packagewas notadmissibleunder GOMpackagesProgramme onfodder supplywas includedin GOIpackagewithoutassessing thelocal needs.Audit Report (Farmers’ packages) for the year ended 31 March 200710failed to reconcile the differences in expenditure figures compiled by it andthose reported by the implementing departments.2.8 Recommendations• Available data needs to be shared across the implementing departmentsfor the purpose of identification of beneficiaries as well as forallocation of funds amongst various components.• Deficiencies adversely impacting the components need to be removed.• Distinct account head for the expenditure specific to the package needsto be opened.Government accepted the above recommendations during exit conference(November 2007).=======================================CHAPTER III: IMMEDIATE RELIEF MEASURESSeven components were included in the packages for immediate relief to thedistressed farmers. The components and the implementing agencies were asunder:Name of component Name of implementing departmentDebt relief to farmers (GOM & GOI)Refund of Capital Formation Fund(GOM)Ban on illegal money lending (GOM)Co-operation DepartmentCompensation to cotton growers(GOM)Agriculture DepartmentImmediate relief in suicide cases(GOM)Assistance for health and educationfrom PMNRF (GOI)Relief and Rehabilitation wingCommunity Marriages (GOM) Women & Child Welfare Department3.1 Debt relief to farmersGOM decided (December 2005 and February 2006) to waive interest on croploans upto Rs 25,000 taken by farmers of six districts from all DCC banks,Nationalised banks and Rural banks. Loans outstanding as on 30 November2005 were only considered for interest waiver. The loans were to berescheduled at nine per cent interest per annum and repaid in three equalannual installments with a two years moratorium period. Amount of penalinterest was to be excluded from the amount of interest waived.In the GOI package (July 2006), it was decided to waive the interest on allagricultural loans over due as on 30 June 2006 and reschedule the loans. Noprocessing fee was to be charged while rescheduling the loans. Theexpenditure on waiver of interest was to be shared equally by GOM and GOI.Amount declared in the package for this component was Rs 712 crore.However, total interest claims by the banks were for Rs 824.99 crore. GOMreleased its share (Rs 356 crore) to Joint Registrar, Co-operation Amravati forreimbursement of claims of the banks while GOI share was reimbursed tovarious banks by NABARD and RBI directly.3.1.1 Banks claimed interest without extending fresh loansOut of 17.64 lakh farmers in six DDRCS, 9.29 lakh accounts/cases of loanhaving outstanding principal amount of Rs 1369.85 crore were proposed to berescheduled after waiver of interest. However, fresh loans of Rs 673.88 crore(49 per cent) were given in 4.84 lakh cases.Principal Secretary, Co-operation stated (November 2007) that 1,92,745borrowers were landless farm workers who did not require any crop loan,Fresh loanswere given to4.84 lakhfarmers outof 9.29 lakhfarmersAudit Report (Farmers’ packages) for the year ended 31 March 20071226,400 borrowers had died, 25,129 had sold land, 21,125 had left villages and30,715 did not require any loan. In 62,807 cases there were disputes or lack ofessential documents while in 85,975 cases the farmers had long term loans.Waiver of interest in all these cases did not help the families of the farmersconcerned in income augmentation since the loan was not rescheduled.Further, Government waived interest of 1,92,745 farm workers though thepackages did not envisage assistance to the borrowers who were not farmers.As per ERA survey, 75 per cent respondents were not aware about interestwaiver and 44 per cent said that banks insisted on repayment of earlier loan.Eight per cent farmers stated that banks demanded fees for processing loansand 67 per cent stated that banks asked for mortgage for loan.3.1.2 Excess claim of interest by the banksA few interesting instances noticed relating to the excess claim of interest bybanks are as under:􀂾 As per the guidelines of the packages, interest more than principalshould not be charged for Co-operative loans. Seven branches ofDCC bank test checked, however, claimed interest of Rs 5.13 croreas against principal of Rs 3.19 crore resulting in excess claim ofinterest of Rs 1.94 crore.􀂾 Thirty five test checked branches of Nationalised banks/Cooperativebanks wrongly waived interest of Rs 19.49 crore on26435 written off loan accounts and Rs 9.46 crore on 14,587accounts of loan disbursed under other Centrally SponsoredSchemes.􀂾 Eleven branches of Nationalised / Co-operative banks waivedinterest of Rs 12 lakh on 328 accounts where loans were taken forpurchase of trucks, jeeps, shares of spinning mills, etc.􀂾 Two branches of Nationalised/Co-operative banks claimed excessinterest of Rs 3 lakh on 110 current loan cases due to application ofincorrect rate of interest and inclusion of current cases of loan.Principal Secretary, Co-operation agreed (November 2007) to refer toGOI/NABARD the cases of inadmissible claims of interest claimed / waivedby the respective branches of Nationalised/ Co-operative Banks and review thecases of excess interest of Rs 3 lakh claimed by two banks and Rs 1.94 croreby the DCC banks.3.2 Refund of Capital Formation FundThis component of the GOM package was applicable throughout the State.Under the Maharashtra Raw Cotton (Procurement, Processing and Marketing)(MRCPPM) Act 1971, the Maharashtra State Co-operative Cotton GrowersFederation (Federation) was appointed as the sole agent for procurement,Nationalisedbanks and Cooperativebankswrongly waivedinterest ofRs 28.95 croreChapter III - Immediate relief measures13processing and marketing of cotton from 1972. The Act provided creation ofthe Capital Formation Fund (CFF) for continuous operation of the scheme andrepayment of the CFF along with interest after lapsing of the Act. The Actlapsed on 30 June 2001.The Federation had collected Rs 216.91 crore out of the guaranteed price paidto the farmers’ between 1981-82 and 1992-93. No deduction was made for theCFF from the farmers after 1992-93. However, the amount collected underCFF was not refunded to the farmers till it was included as a component in thepackage (GOM).Between February 2006 and March 2007, GOM released Rs 875.53 crore tothe Federation for refund of the CFF. The amount was paid to the Federationas loan. Of these, Rs 704.48 crore was refunded to farmers as of March 2007.In the six districts, out of Rs 405.15 crore released by GOM, Rs 396.59 crorewas refunded to the farmers and Rs 8.56 crore was lying undisbursed with theFederation as of March 2007.Principal Secretary, Co-operation stated (October 2007) that due to heavylosses to the Federation, the amount of CFF could not be refunded to thecotton growers and Government sanctioned loan to the Federation for refundof CFF even though they had no responsibility to take over the liability of theFederation.The reply was not tenable as the funds provided for refund of the farmer’sshare in the CFF were not specific for the six selected districts. Further,lending to Federation who had no capacity to repay, implied misclassifying‘expenses’ as ‘investments’ in Government accounts.3.2.1 Payment of compound interest on Capital Formation FundAs per Rule-11 (3) (i) of MRCPPM (Capital Formation Fund) Rules 1984, theinterest earned on CFF shall be distributed in proportion of the amount of theindividual grower’s standing contribution in the CFF and it shall be credited tothe individual account of the farmers. As per the rules, simple interest was tobe calculated at 12 per cent per annum on six monthly basis i.e. July toDecember and January to June and the interest was to be paid in cash toconcerned individual cotton growers as per his share of CFF.In six test checked districts, the amount of CFF with the Federation wasRs 96.71 crore upto 1992-93 on which compound interest upto June 2004, i.e.Rs 308.72 crore was paid as against simple interest at 12 per cent per annumi.e. Rs 148.57 crore. Thus, excess interest works out to Rs 160.15 crore.Principal Secretary, Co-operation stated (November 2007) that decision to paycompound interest on the amount of CFF was taken by the Government inJanuary 1991. The reply was not tenable as the Government letter dated 16January 1991 was about 12 per cent simple interest and not compoundinterest.Farmers’ share inCapitalFormation Fundwas refundedonly after it wasincluded as acomponent in theGOM packageCompoundinterest wasallowed on CFFinstead of simpleinterest. Excessinterest paid wasRs 160 crore.Audit Report (Farmers’ packages) for the year ended 31 March 200714Further, records of five2 test checked Zonal offices of the Federation showedthat 275 complaints were received about non-distribution of chequesamounting to Rs 9.49 lakh being the farmers’ share of CFF. The Zonal officeshad taken up the matter with the firm which printed the cheques as there werevariations in the names of the beneficiaries. This resulted in denial ofimmediate relief to 275 farmers even after lapse of nearly two years.Principal Secretary, Co-operation stated (October 2007) that out of 275complaint cases, 96 cases involving Rs 5.90 lakh (with interest) were solvedand Federation has been instructed to solve the remaining complaints.As per the ERA survey report, 65 per cent respondents confirmed receipt ofCFF.3.2.2 Denial of benefits to farmersTwo spinning mills of the Amravati District collected Rs 14.34 lakh from5500 farmers upto 1991-92 towards contribution to the Capital FormationFund but did not deposit the same with the Cotton Federation. Consequently,cheques of Rs 1.10 crore could not be issued to 5500 farmers.Principal Secretary, Co-operation agreed (November 2007) to pay the amountof CFF payable to the farmers and recover the same from the liquidators of thespinning mills.3.3 Ban on illegal money lendingGovernment of Maharashtra declared (December 2005) that all farmers, whoobtained loan from the unregistered money lenders have to treat themselves asfree from that loan. This was to be publicised. It was also to be ensured by theCo-operation Department that licensed money lenders charged interest as perthe money lending Act. Government issued necessary orders inFebruary 2006.No funds were allocated by GOM for this component. In six test checkedDDRCS offices, no expenditure was incurred even on publicity of theGovernment decision. Department thus, failed to address the distress offarmers in the area, as was declared through the package.Principal Secretary, Co-operation stated (October 2007) that DDRCS has gotno money to spend on publicity. Publicity was, however, made by thedepartmental officers with the help of District Co-operative Banks.ERA survey showed that 75 per cent respondents were unaware of this reliefwhich indicated that the publicity was not adequate and effective.3.3.1 Action initiated against illegal money lendersDDRCS and Assistant Registrar of Co-operative Societies (ARCS) in the sixdistricts received 2867 complaints in connection with sale deed of immovable2 Amravati, Akola, Khamgaon, Wani and Yavatmal.Two hundredseventy fivefarmers did notreceive benefitsdue to variationsin names printedon chequesChapter III - Immediate relief measures15property by the money lenders as of March 2007. Of these, 2018 cases wereinvestigated and 849 cases (42 per cent) were pending for investigation as ofOctober 2007.The action initiated against the illegal money lenders in most cases led toorders under Section 13-B3 of the Bombay Money Lending Act being passedby the respective ARCS.In Akola and Amravati Districts in 43 cases involving land costingRs 32.96 lakh of 46 farmers, the ARCS decided (March 2006) the executedsale deed as a matter of illegal money lending and declared the farmers freefrom debt. However, the farmers did not get the intended benefit as BombayHigh Court, Nagpur Bench, in eighteen writ petitions filed by money lenders,passed orders (October 2006) setting aside the orders passed by the ARCSunder Section 13-B of the Act and restrained authorities from passing anyorders under Section 13-B of the Act regarding possession of immovableproperties purchased through registered sale deeds. Government neitherappealed against these orders (in the Supreme Court) nor took any remedialaction like amendment of the relevant Acts to secure interest of the indebtedfarmers, as of September 2007. Consequently, the affected farmers did not getthe intended benefit of the Government decision of December 2005.Principal Secretary, Co-operation agreed (November 2007) that limitations oflaw which emerged from the decision of the hon’ble High Court would belooked into while amending the Act in future.3.4 Compensation to cotton growersMention was made in paragraph 4.1.1 of the Report of the Comptroller andAuditor General of India for the year ended 31 March 2005 of the damage toorange crop due to scanty rain and depletion of water table during thepreceding three to four years in orange growing areas of Vidarbha (whichincluded some of the districts covered by the package). Instances of paymentof compensation to ineligible farmers were also brought out in this paragraph.Similar omissions were noticed while compensating cotton growers as detailedbelow:Cotton growers throughout the State suffered losses during 2005-06 due toincessant or scanty rains in various parts of the State, followed by shortfall incotton yield due to diseases. To compensate the cotton growing farmers,Government, as a special case, decided (February 2006) to pay compensationof Rs 1000 per hectare (ha.) (subject to a minimum Rs 500 and maximum of2 ha.). The GOM package declared Rs 134 crore for this purpose.The payment was to be made by the District Superintending AgricultureOfficer (DSAO) by cheques through DCC banks. A data base of land recordswas available in the Tahsildar’s office, through which computer generated3 The Section provides for disposal of property pledged with illegal money lenderDepartmentacted withoutproper legalmandateAudit Report (Farmers’ packages) for the year ended 31 March 2007167/124 document of individual farmer was issued upon charging fees. Instead ofusing same database to generate the list of eligible farmers, the AgricultureDepartment paid compensation on the basis of lists prepared by talathis in theRevenue Department.Principal Secretary, Agriculture, confirmed the facts and stated that it wasusual practice to pay compensation on the basis of information from revenueofficials.Further, Maharashtra Remote Sensing Application Centre (MRSAC), Nagpurhad estimated (2005-06) the district-wise area in which cotton was cultivated.Area under cotton cultivation was also depicted in the Crop Cultivation Reportprepared by the DSAO and Agriculture Development Officer (ADO), ZP.However, DSAOs paid compensation for area of cotton cultivation in eachdistrict based on the lists prepared by the talathis.It was noticed that the total area reported by the Collectors for payment ofcompensation was in excess by 2,66,005 ha. than the area reported byMRSAC and 1,91,326 ha. more than that reported by the DSAOs.In 13 test-checked talukas the percentage variation in the area under cotton asper Crop Cultivation Report (CCR) and the lists prepared by the Talathis ofRevenue Departments ranged between 00.47 and 32.03. This resulted inexcess payment of Rs 9.56 crore in respect of 95190 ha. of land as shown inAppendix VIII (Page 42).Principal Secretary, R&R stated that action would be taken where variations inthe area were noticed.ERA survey showed that 46 per cent respondents reported the receipt ofamount on account of cotton compensation.3.4.1 Compensation not disbursed for want of fundsScrutiny of records in TAO, Amravati revealed that 224 eligible farmers weredeprived of the compensation of Rs 2.14 lakh due to non availability of funds.Principal Secretary, Agriculture agreed (November 2007) to release thenecessary funds to the implementing agencies concerned.3.4.2 Retention of money out of Government accountIn 18 selected talukas, Rs 39.11 crore was received and deposited in variousDCC banks in 2006-07 for crediting the amount to the accounts of the farmersconcerned. In seven5 talukas an amount of Rs 53.29 lakh was lyingundisbursed with the banks and remained out of Government accounts as ofMay 2007.Principal Secretary, Agriculture (November 2007) accepted the facts andstated that unspent amount was finally refunded to Government. It was also4 Format in which land records are maintained.5 Chandur Bazar, Chikhaldara, Mehkar, Morshi , Motala, Lonar and PusadReports of threedepartmentsregarding areaunder cottoncultivation weredifferentArea reported byCollectors forpayment ofcompensation tocotton growerswas in excess ofthe areacalculated asestimated byMRSACChapter III - Immediate relief measures17agreed that undisbursed amounts in other talukas would also be ascertained,and credited to the Government account (November 2007).3.5 Grant of immediate relief in suicide casesGovernment decided (December 2005) to pay assistance of Rs 1 lakh to thelegal heirs of the farmers who committed suicide due to crop failure andindebtedness due to outstanding crop loan and interest thereon. Governmentfurther clarified (February 2006) that any member of family of the farmerwould also be considered for relief assistance under this component.At the time of declaration of package (GOM) specific amount for this was notdeclared. Prior to the package, relief in similar cases was being paid throughCM’s relief fund. However, information regarding the rate/amount of ex-gratiawas not made available to Audit (November 2007). In one Public InterestLitigation (PIL), Mumbai High Court directed (May 2006) to considerincrease in this amount of Rs 1 lakh. Government was yet to act on thisdirection conclusively (November 2007). A graph showing number of suicidecases in all six districts from 2001-02 to 2006-07 is as below:The graph indicates increase in number of suicides in six districts despitedeclaration of the packages. The average number of suicides in the first twoSuicides in six districts of Vidarbha02004006008001000120014001600suicidesApr to June 9 19 37 50 71 312 283July to Sept. 20 25 33 235 102 385 325Oct to Dec 13 37 32 112 200 412Jan to Mar 24 41 44 58 339 305Total 66 122 146 455 712 1414 6082001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08Before the PackageGOMPackage(Dec2005)G O IPackage(June2006)Audit Report (Farmers’ packages) for the year ended 31 March 200718quarters of 2007-08 declined marginally compared to the respective quarter ofprevious year, yet the numbers were significantly higher than the number ofsuicides in corresponding quarters of the years 2001-02 to 2005-06.3.5.1 Delay in payment of relief assistanceAs per the Government instructions (January 2006), the decision of paymentof relief assistance was to be taken within a period of 15 days by a Committeeheaded by the District Collector. In 11 talukas in four districts there weredelays ranging from 10 to 323 days in 72 out of 199 eligible cases (36 percent), as detailed below:Name ofthe districtTaluka Total number ofeligible suicide casesNumber ofdelayed paymentcasesDelay in numberof daysAkola Murtizapur 32 8 11 to 98Deulgaon raja 16 9 16 to 98Jalgaon Jamod 11 3 16 to 67Lonar 5 2 31 to 81Malkapur 8 1 11Mehkar 9 8 19 to 64BuldanaMotala 13 3 16 to 52Ghatanji 46 6 25 to 323 YavatmalPusad 9 7 12 to 19Washim Karanja 36 17 10 to 100Washim 14 8 10 to 72Total 199 72Director General, VNSSM agreed to investigate the inordinate delays and fixresponsibility (November 2007).3.5.2 Relief paid without ensuring eligibilityIn Yavatmal District, 15 cases6 of suicide were considered as eligible forpayment of relief (Rs 15 lakh) even though the post-mortem (PM) reportindicated the probable cause of death as ‘may be due to consumption ofpoison’ and suggested (July 2004 to February 2007) for examination ofviscera by chemical analysis. There were no records to show that viscera weresent for chemical analysis in any of these cases.In 16 cases (Yavatmal: 11 and Wardha: 5), Rs 16 lakh was paid withoutobtaining PM reports and / or police panchanama in support of the casesreported as suicides.The Director General, VNSSM directed (November 2007) the Collector toinvestigate reasons for not obtaining PM reports in these cases. Collector,Yavatmal stated (November 2007) that PM reports in all cases have beenobtained and would be sent to Audit. However, the same were not received asof January 2008.3.5.3 Relief paid on wrong criteriaIn Ghatanji Taluka three cases of deaths out of 46 eligible cases of deathscaused due to consumption of poison in July 2001, March 2003 and July 20036 Pusad-8, Ghatanji-7Payment ofrelief wasdelayed by 10to 323 days insuicide casesIn suicidecases theCollector,Wardhadecidedeligibility forimmediaterelief withoutpost-mortemreportChapter III - Immediate relief measures19were considered (May 2006) by District Level Committee headed by DistrictCollector for relief assistance (Rs 3 lakh) despite report from theSuperintendent of Police that the suicide was due to ill health or familydisputes.Director General, VNSSM agreed (November 2007) to examine the threecases in Ghatanji and to avoid recurrence of similar cases in future.3.5.4 Assistance kept in abeyanceIn the test checked talukas of Karanja (Lad) and Washim, payment ofassistance in 28 suicide cases registered between January and May 2007(Rs 28 lakh) was held in abeyance by the Collector, Washim on the plea thatthe deceased farmers had no loan outstanding on the date of their death.Director General, VNSSM, Amravati stated (November 2007) that orders toregularise the withheld cases have been issued to Collector, Washim. The fact,however, remains that there was delay in payment of immediate relief to thefamily of the deceased farmers.3.6 Community marriagesThe GOM package provided financial assistance of Rs 10,000 (in kind) eachfor marriage of daughter of a farmer, performed under Community MarriageProgramme. Similarly, grant of Rs 1000 per couple was also payable to thearranging NGO. The terms and conditions (February 2006) stipulated that thebride and bridegroom were required to be domiciled in Maharashtra and rationcard, school leaving certificate or other documents were to be considered as aproof of the fact that bride is a daughter of a farmer. Marriage certificates werealso to be issued to the couples by the District Women and Child WelfareOfficer (DWCDO) and the Registrar of marriage immediately. GOM releasedRs 14.23 crore during 2005-07 for this component, of which Rs 9.22 crore wasspent.In 18 selected talukas, an expenditure of Rs 4.43 crore was incurred during2005-07 on performing 4027 marriages under community marriageprogramme wherein identification of the beneficiary was done only on thebasis of school leaving certificate of the bride, without any valid proof of herbeing daughter of a farmer or farm labourer.In six districts, out of 10,786 community marriages performed during2005-07, marriage certificates were not issued in 8,329 cases (77 per cent) byDWCDO and the Registrar, though prescribed in Government order. Of these,marriage certificates in 3,028 cases (Amravati) were issued by an NGO incontravention of Government orders.Secretary, Women and Child Welfare agreed to look into the lacunae andstated that specific instructions would be issued to confirm the eligibility ofbeneficiary and to take necessary steps to ensure issue of marriage certificateswithin one month after the marriage.Assistance ofRs 4.43 crorewas extendedwithoutensuringeligibility of thebeneficiariesMarriageCertificateswere notissued in77 per centcasesAudit Report (Farmers’ packages) for the year ended 31 March 200720ERA survey showed that less than one per cent respondents had applied forparticipation in community marriage scheme. Of them, 30 per cent reportedhaving married their daughters in community marriage programme.3.7 ConclusionShort term measures were aimed at providing immediate relief to the farmersin distress. Implementation of these components was saddled with delays inpayment of the assistance. ERA survey showed that 75 per cent respondentswere not aware of interest waiver. The banks wrongly waived the interest ofthe loans written off and the loans given on other Centrally SponsoredSchemes. Relief declared by the Government regarding illegal money lendingdid not get adequate publicity. Farmers did not get the benefit endorsed in thepackage consequent on passing of the order of hon’ble High Court.Expenditure was incurred on community marriage without any valid proof foreligibility of the beneficiary and marriage certificates were not issued in manycases.3.8 Recommendations• Inadmissible interest claimed by the banks needs to be recovered.• Money Lending Act may be re-examined in the light of decision ofhon’ble High Court.• Assistance for community marriage should be extended only to theeligible couples.Government accepted the above recommendations during exit conference(November 2007).===============CHAPTER IV: LONG TERM MEASURESThe packages contained eight programmes which were long term measures foralleviating farmers’ distress. The components and the implementing agencieswere as under:Name of component Implementing DepartmentAssistance to farmers for increase inagriculture production (GOM)Agriculture DepartmentAgricultural allied activities for supplementaryincome (GOM/GOI)Animal Husbandry and DairyDevelopment DepartmentMicro irrigation (GOI) Agriculture DepartmentAssured irrigation (GOI) Water Resources and WaterConservation DepartmentSeed replacement and cropping intensity(GOI)Agriculture DepartmentAgriculture Insurance Scheme (GOM) Agriculture DepartmentVidarbha Panlot Mission (GOM) Water Conservation DepartmentOther components (GOI/GOM) Agriculture, Co-operation andWater Conservation Departments4.1 Assistance to farmers for increase in productionGOM decided (February 2006) to provide agriculture inputs and implementsto 60,000 selected farmers from six districts of Vidarbha to assist theeconomically weaker farmers. Under this component, assistance of Rs 25,000each (with 50 to 100 per cent subsidy) was to be provided within a period ofthree years in the form of seeds, fertilizers, insecticides, sprayers, landdevelopment and water conservation. Conditions of eligibility for thesebenefits included maximum land holding not exceeding six ha. and annualincome below Rs 20,000. District level Committee headed by DistrictCollector was to select the beneficiaries and the Taluka Agriculture Officerwas to implement the component.Out of Rs 150 crore allocated for three years, Government releasedRs 85.40 crore during 2005-07 as reported by the Agriculture Department. Ofthese, Rs 49.99 crore was spent as of March 2007. Under utilisation wasmainly due to release of funds at the fag end of the year (29 and30 March 2007) by the Commissioner of Agriculture, Pune to the DSAOs.Principal Secretary, Agriculture admitted (November 2007) that unspentamount was transferred to Agriculture Technology Management Agency(ATMA) of which Rs 7 crore was lying unspent with ATMA as ofSeptember 2007.Late release offunds led tograntsremainingunspentAudit Report (Farmers’ packages) for the year ended 31 March 2007224.1.1 Selection of beneficiariesThe programme envisaged selection of 10,000 farmers from each of the sixdistricts. The beneficiaries were to be selected from the economically weakerfarmers giving priority to poorest and most backward class farmers.In 18 talukas, out of 29,200 farmers who applied for supply of inputs andimplements, 16,577 farmers (57 per cent) were provided benefits as ofMarch 2007. As package components were for reducing the agrarian distress,short coverage of 12,623 beneficiaries despite availability of funds needsdetail analysis.Principal Secretary, Agriculture stated (November 2007) that the target of60,000 farmers was set on ad-hoc basis. Hence, all farmers could not becovered.The reply indicated inadequate assessment of required inputs coupled withad-hocism in determining number of farmers targeted under this component.Further, in Seloo taluka (District Wardha) 586 farmers applied for supply ofinputs/implements to Taluka Agriculture Officer against the target of 869.District Level Committee headed by Collector, Wardha selected 129 farmersfrom the most backward class farmers. Of these, 34 farmers had land holdingof two ha. and above, whereas 331 farmers (not from most backward class),who had land holding below two ha., were not selected inspite of they beingpoorer than those selected. Similarly, in seven other talukas of the District,selection of the beneficiaries was made without giving priority to the poorestfarmers.During exit conference (November 2007), the Chief Secretary directed thePrincipal Secretary (R&R) to obtain a report from the present DistrictCollector and to take appropriate action.4.1.2 Dishonoured chequesScrutiny disclosed that the TAO, Karanja, (Lad) (District Washim) hadissued (July 2007) cheques of Rs 15,000 each to 349 beneficiaries forpurchase of a pair of bullocks (total amount Rs 52.35 lakh) as against thetarget of 110 beneficiaries fixed by the District Level Committee. Out of349, nine cheques were dishonoured on 14 August 2007 as the TAO issuedcheques without confirming the balance in the bank account. The chequeswere subsequently encashed on 31 August and 01 September 2007. Thematter needs investigation.Principal Secretary, Agriculture stated (November 2007) that the TalukaAgriculture Officer had been suspended (November 2007).4.1.3 Non-distribution of inputs/implementsOut of 18 test checked talukas, inputs and implements worth Rs 1.33 crorewere lying undistributed in eight talukas.Forty three percent of theneedy farmerswere notprovided theagriculturalinputs andimplementsChapter IV – Long term measures23Principal Secretary, Agriculture agreed (November 2007) to distribute thebalance material in next three months and also agreed to issue instructions toavoid purchase of inputs without assessing actual requirement.4.2 Agricultural allied activities for supplementary incomeProviding supplementary income avenues to the farmers through agriculturalallied activities was a component in the packages. For this component,Rs 30 crore (GOM) and Rs 135 crore (GOI) spread over three years wereearmarked. Maharashtra Live Stock Development Board (MLDB), Akola wasthe nodal agency for implementing this component.As per Agriculture Department, out of total Rs 30.89 crore released for thecomponent, total expenditure incurred was Rs 14.17 crore as of March 2007.Out of the unspent balance of Rs 16.72 crore, Deputy Commissioner, MLDB,Akola deposited (October and December 2006) Rs 5 crore with twonationalised banks as fixed deposit and earned interest of Rs 14.52 lakh. Theamount remained unaccounted for as of March 2007.The Secretary, AHDD&F agreed (November 2007) to ensure the accountal ofthe interest earned out of the funds parked in the banks.4.2.1 Excess payment of subsidyAs per the norms prescribed by GOM (February 2006), the financial limit ofthe project cost for the Self Help Groups (SHGs) of Above Poverty Line(APL) beneficiaries was Rs 2 lakh and amount of subsidy payable to eachAPL group was to be restricted to Rs 1.50 lakh.In 13 test checked talukas, subsidy of Rs 2.64 crore was paid to 105 SHGsinstead of Rs 1.57 crore admissible as per the norms, resulting in excesspayment of Rs 1.07 crore during 2005-2007 (Appendix IX – Page 43).Secretary, AHDD&F agreed (November 2007) to investigate the matter.4.2.2 Deviation from normsIn Yavatmal District, subsidy of Rs 1.86 crore was paid on purchase of 1470animals to 735 beneficiaries at a time between December 2006 andMarch 2007. Similarly, in Buldana and Wardha Districts, subsidy ofRs 2.66 crore was paid on purchase of 2138 animals between a gap of one tofour months for supply to 1069 beneficiaries. This was contrary to theguidelines issued by GOI for providing a gap of six to seven months before thesecond purchase.The Secretary, AHDD&F stated (November 2007) that revised norms withreasonable relaxation to GOI guidelines would be framed in view of localconditions and strictly observed in future.Excess subsidywas paid toAbove PovertyLine SHGsAudit Report (Farmers’ packages) for the year ended 31 March 2007244.3 Micro irrigationFor micro irrigation, Rs 26 crore per year for three years was declared(August 2006) in the package (GOI). The component was applicable to alldistricts in the State for horticulture crops upto 2005-06. Out of Rs 20.67 crorereleased during 2006-07 the total expenditure incurred was Rs 20.62 crore asof March 2007. A few interesting points noticed were as under:(i) Under the component, drip and sprinkler sets were provided at 50 percent subsidised cost. The subsidy was to be shared between Central and StateGovernments in a ratio of 80:20. The scheme was meant for the farmershaving electric connection and source of water for irrigation and to beimplemented through Sub-Divisional Agriculture Officer (SDAO).In 18 test checked talukas, drip irrigation sets costing Rs 10.86 crore wereprovided to 1878 farmers at an average cost of Rs 57,847 per set. Each farmerwas to bear 50 per cent average cost being Rs 28,924, which was a largeamount for a poor farmer.The Principal Secretary, Agriculture stated (November 2007) that the matterwas reported to GOI in September 2006 for increasing the subsidy.ERA survey showed that about two per cent respondents had applied forsprinklers/drip irrigation facilities.(ii) As per the norms prescribed by Commissioner of Agriculture, Pune,the average distance for sowing of cotton of various qualities works out to lessthan 1 metre (m) X 1 m. In 53 cases involving expenditure of Rs 26.81 lakh inAmravati Tahsil and Morshi Tahsil of Amravati District showed that in19 cases the distance of sowing cotton was wrongly shown as 1.5 m X 1.5 m.This resulted in excess payment of subsidy by Rs 1.55 lakh. The PrincipalSecretary, Agriculture (November 2007) agreed to look into theappropriateness of subsidy as prescribed in the guideline.(iii) In Amravati (one case) and Murtizapur taluka (four cases) subsidy ofRs 4.22 lakh was paid on the basis of unsigned form 7/12. In reply(October 2007), the SDAO/Tahsildar provided wrong spot verificationreport/incorrect 7/12 to Audit. Principal Secretary, Agriculture agreed(November 2007) to investigate and take action in the matter.4.3.1 Pending proposalsIn four sub-divisions (Akola, Mehkar, Morshi and Yavatmal) out of 5571proposals received for subsidy of Rs 6.91 crore, 2841 proposals forRs 4.33 crore were pending as of June 2007 for want of funds under thecomponent, despite availability of unspent amount in other components.The Principal Secretary, Agriculture stated (November 2007) that all pendingproposals have now been cleared. The fact remains that there was delay inclearing the proposals.Changes inguidelines notconsidered forpayment ofsubsidyProposalsremainedpending forwant offundsChapter IV – Long term measures254.4 Assured irrigationAssured irrigation was announced as a component of the GOI package forRs 2177 crore to create irrigation potential for 1.60 lakh hectares in six suicideprone districts. Under this component, assistance of Rs 2085.38 crore was tobe provided for eight major, nine medium and 65 minor irrigation projects ofthe State, as grant by the GOI under Accelerated Irrigation Benefit Programme(AIBP). The balance amount of Rs 91.88 crore for 492 minor irrigationprojects of local sector was to be provided as loan from NABARD.4.4.1 Short release of fundsAs per records of Water Resources Department and Vidarbha IrrigationDevelopment Corporation (VIDC), Nagpur no funds for the proposed projectswere received upto February 2007. Position of Central assistance releasedthereafter under AIBP was as below:-(Rupees in crore)Type of project NumberofprojectsproposedunderGOIpackageGrantrequired forproposedprojectsunder GOIPackageduring2006-07Numberof projectsconsideredforassistanceduring2006-07Proportionategrantrequiredduring2006-07GrantactuallyreceivedShortreceipt ofCentralgrantMajor projects 8 489.62 5 273.28 67.48 205.8Medium projects 77 151.84 5 85.51 48.11 37.4Minor irrigationprojects to befunded underAIBP228 85.96 22 85.96 55.89 30.07Total 37 727.42 32 444.75 171.48 273.27Short receipt of Central assistance of Rs 273.27 crore (61 per cent of GOIgrants required) hampered the envisaged projects in the first year of thepackage. It was noticed that the land required for two major projects (LowerWardha and Khadakpurna) in the priority list, was not in possession of theDepartment.The Executive Director, VIDC, Nagpur stated (July 2007) that due to timerequired for obtaining various clearances, the funds of Rs 273.27 crore werenot released by GOI.Thus, creating irrigation potential within three years of declaration of packageappears to be difficult.7 Two medium projects deleted (one due to non-clearance of forest land and other nearingcompletion).8 Forty three Minor irrigation projects were decided to be funded through NABARD.Audit Report (Farmers’ packages) for the year ended 31 March 200726Delay in execution of projectGovernment of India revised (December 2006) the eligibility criteria forfunding. According to the revised criteria if the State Government fails tocomply with the agreed date of completion, the amount released is treated asloan and recovered as per usual terms of recovery of the Central loan. Due toshort release / delayed release possibility of completion of the projects withinthe agreed dates is remote. This presents the risk of Rs 2085.38 crore (56 percent) of total package amount becoming loan instead of grant.Government stated (October 2007) that proposals to get the date of completionof project extended was being submitted to GOI to avoid the possibility ofconversion of grant into loan.4.4.2 Project estimates for NABARD loanIn the package it was proposed that 492 Minor Irrigation projects (LocalSector) estimated (July 2006) to cost Rs 91.88 crore would be executed withthe help of loan from NABARD. Proposals in respect of only 319 MinorIrrigation (MI) projects costing Rs 210 crore (as against Rs 91.88 crore tocover 492 projects) were submitted to NABARD by Rural Development andWater Conservation Department. Of these, 134 MI project proposals costingRs 74.70 crore were sanctioned (July 2007) by NABARD. Remaining185 projects were not sanctioned, as they were not technically feasible andeconomically viable (July 2007).The Principal Secretary, Water Conservation stated (November 2007) that outof 492 schemes, 233 schemes were completed upto March 2007 through Statefunds. Out of remaining 259 schemes 195 would be taken up throughNABARD assistance and balance 64 schemes would be completed throughState fund.The reply was not tenable as NABARD had already rejected (July 2007),Governments proposals for 185 projects on the ground of being technicallyunfeasible and economically unviable. Taking up these projects with Statefunds would amount to risking investment with potential failures.4.5 Seed replacement and cropping intensityOne of the components in GOI package included distribution of seeds tofarmers at a subsidy of 50 per cent subject to a limit of one ha. (of landholding). Instructions for implementation of seed distribution component wereissued by the Commissioner of Agriculture, Pune on 21 August 2006.An amount of Rs 180 crore was allotted for this component for a period ofthree years. National Seeds Corporation Limited (NSC), New Delhi was thenodal agency. However, the seed supply was to be done by Maharashtra StateSeeds Corporation (MSSC) as per demand of Agriculture DevelopmentOfficer (ADO), Zilla Parishad. Each farmer was to be issued a permit by TAOOne hundredeighty five minorirrigationprojects were notsanctioned byNABARD on theground oftechnicalfeasibilityChapter IV – Long term measures27for each season, which could be produced at Taluka Kharedi Vikri Sanghalongwith his share of 50 per cent for purchasing seeds.4.5.1 Funds lying unutilisedAs against Rs 60 crore declared for 2006-07, GOI released Rs 25.46 crore.The VNSSM showed (April 2007) GOI release as Rs 17.50 crore. Theutilisation certificate of MSSC, Akola, however, indicated (July 2007) thattotal value of seed distributed to farmers was Rs 26.57 crore. Excludingfarmers’ share of Rs 13.29 crore in the cost of these seeds, Rs 12.17 crore waslying unutilised with NSC, New Delhi.The Principal Secretary, Agriculture confirmed the facts and stated(November 2007) that amount of utilisation certificate (Rs 26.57 crore) wasmisleading. He also agreed to verify correctness of figures reported by MSSCand NSC.4.5.2 Short supply of seeds due to incorrect estimationDeputy Director, Seed, Pune estimated the district-wise requirement of seedsfor four9 crops as 1.37 lakh quintals (for total 64 talukas), which was muchless compared to the demand of 18 talukas (0.84 lakh quintals) indicatingincorrect estimation. Supply orders were given directly by field officers toMSSC.Test check of 18 talukas showed that as against demand for 0.84 lakh quintals,MSSC, Akola supplied 0.31 lakh quintals (37 per cent) of seeds resulting inshort supply of 0.53 lakh quintals (63 per cent) of seeds to the farmers during2006-07.As per the estimates, seed requirement for 2007-08 and 2008-09 were lessthan the requirement estimated for 2006-07. For major crops like wheat,sunflower, maize etc. no requirement was projected for 2008-09. Theestimates were not realistic as these were made based on the amount allocatedto this component and not based on actual requirement.The Principal Secretary, Agriculture stated (November 2007) that effortswould be made to assess the requirement of seeds realistically.4.6 Agriculture Insurance SchemeTo protect the farmers from the loss of crops due to Natural Calamity or anyother reasons, Government as a special case decided (February 2006) to paysubsidy of 50 to 75 per cent of the premium payable on Crop Insurance. Thiscomponent was allotted Rs 30 crore and Rs 19 crore were released uptoMarch 2007. However, Rs 9.13 crore was lying unspent as of March 2007with Commissioner of Agriculture, Pune.9 Gram, Kardi Safflower, Sunflower, WheatNorequirementof seed forwheat, maize,sunflower, etc.was projectedfor 2008-09Audit Report (Farmers’ packages) for the year ended 31 March 200728Against 4.48 lakh farmers in 15 test checked talukas, only 0.50 lakh farmers(11 per cent) participated in the crop insurance. The taluka-wise participationranged between one per cent (Seloo) to 33 per cent (Chikhaldara). Thus, therewas poor participation of cultivators in insurance scheme.The Principal Secretary, Agriculture agreed (November 2007) to review thecontinued allocation to this component, as the crop insurance was notattracting the farmers.ERA survey showed that only three per cent respondents were covered undercrop insurance scheme.4.7 Vidarbha Panlot MissionTo create availability of water for irrigation to achieve water conservation andto generate agro based self employment through development of watersheds inthe six suicide prone districts, Vidarbha Panlot Mission was included in theGOM package. Government allocated Rs 100 crore for this component and theguidelines were issued in February and September 2006. However, out ofRs 97 crore released by the Government between March 2006 andFebruary 2007, Rs 17.04 crore was spent as of March 2007.The Principal Secretary, Water Conservation stated (November 2007) thatdelay was due to change in the implementing agency from District RuralDevelopment Agency (DRDA) to Agriculture Department and delay inapproval to the relaxation to GOI guidelines, proposed (May-September 2006)by GOM.Failure to start the works even after two years of declaration the GOMpackage (December 2005) would adversely impact the achievementsenvisaged in the package.4.7.1 Delayed issue of guidelinesIn 18 test checked talukas, out of Rs 14.91 crore allocated, Rs 8.53 crore(57 per cent) remained unutilised due to delay in release of funds and issue ofdetailed guidelines (September 2006) of Panlot mission.Principal Secretary, Water Conservation Department agreed (November 2007)to speed up the completion of balance works.Chapter IV – Long term measures294.8 Other Components of the packagesUnder the long term measures there were six other components. Theimplementation was not satisfactory as detailed below:(Rupees in crore)ComponentandimplementingDepartmentsBrief description Amountdeclared/AmountreleasedAmountspent(uptoMarch 2007)Audit findings/ Department’s reply(i) ExtensionServices (GOI)(AgricultureDepartment)This was alreadybeing implementedthrough AgricultureTechnologyManagement Agency(ATMA) from 2005-06 for empoweringthe farmers.3.00/4.283.82 Test check showed that TAO, KaranjaLad had received grant ofRs 5.97 lakh during 2006-07.However, no cash book wasmaintained. Receipt of funds was alsonot entered in the Bank Pass Book ofthe bank account opened for thepurpose.The Principal Secretary,Agriculture stated that TAOconcerned has already beensuspended.(ii)HorticultureDevelopment(GOI)(AgricultureDepartment)The programme wasbeing implemented in23 districts ofMaharashtra includingsix suicide pronedistricts of Vidarbhawith 100 per centsubsidy from GOI(June 2005)225.00 (forthreeyears)/40.9811.72 Out of Rs 40.98 crore released,Rs 11.72 crore only was utilised in2006-07. The amount was given(June 2006) to Maharashtra StateHorticulture Medicinal PlantationBoard and kept out of Governmentaccount without assessing the actualrequirement of funds.The Principal Secretary (Agriculture)stated that a consultant has beenappointed (June 2007) to suggestforward linkage with market forproper utilisation of balance amount.(iii) OrganicFarmingTechnology(OFT) (GOM)(AgricultureDepartment)Various items likeorganic farming,training, vermiculture, etc. wereincluded under thiscomponent30.00/10.309.89 Validation of the OFT was not gotdone from the Agriculture Universityin any of the test checked taluka.Principal Secretary,Agriculture stated (November 2007)that validation requires three to fouryears and the process has already beenstarted.(iv) Jointfarming ofcotton (GOM)(AgricultureDepartment)In order to encouragethe joint cottonfarming, thiscomponent envisagedexecution of aMemorandum ofUnderstanding(MOU) by theFarmers for thepurchase of cotton.- - In three districts as against 9.37 lakhfarmers only 1477 (0.17 per cent)farmers have participated throughseven MOUs executed during 2006-07indicating poor coverage of thefarmers under this component.Principal Secretary,Agriculture stated that coverage andimpact of the component wasimproving.(v) WatershedDevelopment(GOI)AgricultureDepartment)This componentconsists of watersheddevelopmentprogramme and rainwater harvesting, tobe implemented by240.00/60.0035.75 In 18 test checked talukasRs 10.49 crore was spent out ofRs 13.64 crore allocated. Out of 801works taken up for execution, 263were completed and 538 works werein progress.Audit Report (Farmers’ packages) for the year ended 31 March 200730NABARD directly.The third programmecheck dam works wasto be implemented byState AgricultureDepartment with loanfrom NABARD(RIDF).The Principal Secretary,Water Conservation stated that out oftotal 3000 check dams, 2497 werecompleted as of June 2007 andbalance of 503 pertaining to 2006-07and 3000 pertaining to 2007-08 wouldbe completed by June 2008.(vi) Agro basedindustries(GOM) (CooperationDepartment)To encourage theestablishment of agrobased processingindustries in sixdistricts, GOMdecided to providefinancial assistance tothe AgricultureProcessing CooperativeSocieties forraising share capital.No fundallocationunder thiscomponentNotavailableDDRCS Amravati releasedRs 36.30 lakh to two Co-operativeSocieties as 33 per cent share capital.The societies have not started agroprocessingunits as of May 2007. Inother five districts, no proposals werereceived as of May 2007. Thisindicated the lack of response to thecomponent.The Principal Secretary, Cooperationstated (November 2007) thatwork by two Co-operative societieshad already started and five out of 16proposals received were approved bythe Department.4.9 ConclusionFunds for ‘Assistance for increase in production’ were released late; 12,623farmers did not get the benefit despite availability of funds. No priority givento the poorest farmers. A TAO issued cheques to 349 beneficiaries against thetargets of 110; nine cheques were dishonoured for want of cash in bank. SelfHelf Groups were paid subsidies in excess of the admissible norms. Forpurchase of agricultural implements under ‘Micro irrigation’, a farmer’s sharewas too large for a poor farmer. Though proposals for 185 minor irrigationprojects were rejected by NABARD on the ground of being technicallyunfeasible and economically unviable those were taken up for execution.Incorrect estimation of requirement led to short supply of 53,000 quintals ofseeds (63 per cent). Funds for Vidarbha Panlot Mission were underutilized.4.10 Recommendations• Higher rate of subsidy for small and marginal farmers could beconsidered to extend envisaged benefits to larger number of farmers.• Completion of projects under AIBP and from NABARD funds shouldbe monitored closely to avoid treatment of grant as loan by GOI.• Crop insurance coverage could be extended to all crops includinghorticulture.Government accepted the above recommendations during exit conference(November 2007).========================================================================================CHAPTER IV: LONG TERM MEASURESThe packages contained eight programmes which were long term measures foralleviating farmers’ distress. The components and the implementing agencieswere as under:Name of component Implementing DepartmentAssistance to farmers for increase inagriculture production (GOM)Agriculture DepartmentAgricultural allied activities for supplementaryincome (GOM/GOI)Animal Husbandry and DairyDevelopment DepartmentMicro irrigation (GOI) Agriculture DepartmentAssured irrigation (GOI) Water Resources and WaterConservation DepartmentSeed replacement and cropping intensity(GOI)Agriculture DepartmentAgriculture Insurance Scheme (GOM) Agriculture DepartmentVidarbha Panlot Mission (GOM) Water Conservation DepartmentOther components (GOI/GOM) Agriculture, Co-operation andWater Conservation Departments4.1 Assistance to farmers for increase in productionGOM decided (February 2006) to provide agriculture inputs and implementsto 60,000 selected farmers from six districts of Vidarbha to assist theeconomically weaker farmers. Under this component, assistance of Rs 25,000each (with 50 to 100 per cent subsidy) was to be provided within a period ofthree years in the form of seeds, fertilizers, insecticides, sprayers, landdevelopment and water conservation. Conditions of eligibility for thesebenefits included maximum land holding not exceeding six ha. and annualincome below Rs 20,000. District level Committee headed by DistrictCollector was to select the beneficiaries and the Taluka Agriculture Officerwas to implement the component.Out of Rs 150 crore allocated for three years, Government releasedRs 85.40 crore during 2005-07 as reported by the Agriculture Department. Ofthese, Rs 49.99 crore was spent as of March 2007. Under utilisation wasmainly due to release of funds at the fag end of the year (29 and30 March 2007) by the Commissioner of Agriculture, Pune to the DSAOs.Principal Secretary, Agriculture admitted (November 2007) that unspentamount was transferred to Agriculture Technology Management Agency(ATMA) of which Rs 7 crore was lying unspent with ATMA as ofSeptember 2007.Late release offunds led tograntsremainingunspentAudit Report (Farmers’ packages) for the year ended 31 March 2007224.1.1 Selection of beneficiariesThe programme envisaged selection of 10,000 farmers from each of the sixdistricts. The beneficiaries were to be selected from the economically weakerfarmers giving priority to poorest and most backward class farmers.In 18 talukas, out of 29,200 farmers who applied for supply of inputs andimplements, 16,577 farmers (57 per cent) were provided benefits as ofMarch 2007. As package components were for reducing the agrarian distress,short coverage of 12,623 beneficiaries despite availability of funds needsdetail analysis.Principal Secretary, Agriculture stated (November 2007) that the target of60,000 farmers was set on ad-hoc basis. Hence, all farmers could not becovered.The reply indicated inadequate assessment of required inputs coupled withad-hocism in determining number of farmers targeted under this component.Further, in Seloo taluka (District Wardha) 586 farmers applied for supply ofinputs/implements to Taluka Agriculture Officer against the target of 869.District Level Committee headed by Collector, Wardha selected 129 farmersfrom the most backward class farmers. Of these, 34 farmers had land holdingof two ha. and above, whereas 331 farmers (not from most backward class),who had land holding below two ha., were not selected inspite of they beingpoorer than those selected. Similarly, in seven other talukas of the District,selection of the beneficiaries was made without giving priority to the poorestfarmers.During exit conference (November 2007), the Chief Secretary directed thePrincipal Secretary (R&R) to obtain a report from the present DistrictCollector and to take appropriate action.4.1.2 Dishonoured chequesScrutiny disclosed that the TAO, Karanja, (Lad) (District Washim) hadissued (July 2007) cheques of Rs 15,000 each to 349 beneficiaries forpurchase of a pair of bullocks (total amount Rs 52.35 lakh) as against thetarget of 110 beneficiaries fixed by the District Level Committee. Out of349, nine cheques were dishonoured on 14 August 2007 as the TAO issuedcheques without confirming the balance in the bank account. The chequeswere subsequently encashed on 31 August and 01 September 2007. Thematter needs investigation.Principal Secretary, Agriculture stated (November 2007) that the TalukaAgriculture Officer had been suspended (November 2007).4.1.3 Non-distribution of inputs/implementsOut of 18 test checked talukas, inputs and implements worth Rs 1.33 crorewere lying undistributed in eight talukas.Forty three percent of theneedy farmerswere notprovided theagriculturalinputs andimplementsChapter IV – Long term measures23Principal Secretary, Agriculture agreed (November 2007) to distribute thebalance material in next three months and also agreed to issue instructions toavoid purchase of inputs without assessing actual requirement.4.2 Agricultural allied activities for supplementary incomeProviding supplementary income avenues to the farmers through agriculturalallied activities was a component in the packages. For this component,Rs 30 crore (GOM) and Rs 135 crore (GOI) spread over three years wereearmarked. Maharashtra Live Stock Development Board (MLDB), Akola wasthe nodal agency for implementing this component.As per Agriculture Department, out of total Rs 30.89 crore released for thecomponent, total expenditure incurred was Rs 14.17 crore as of March 2007.Out of the unspent balance of Rs 16.72 crore, Deputy Commissioner, MLDB,Akola deposited (October and December 2006) Rs 5 crore with twonationalised banks as fixed deposit and earned interest of Rs 14.52 lakh. Theamount remained unaccounted for as of March 2007.The Secretary, AHDD&F agreed (November 2007) to ensure the accountal ofthe interest earned out of the funds parked in the banks.4.2.1 Excess payment of subsidyAs per the norms prescribed by GOM (February 2006), the financial limit ofthe project cost for the Self Help Groups (SHGs) of Above Poverty Line(APL) beneficiaries was Rs 2 lakh and amount of subsidy payable to eachAPL group was to be restricted to Rs 1.50 lakh.In 13 test checked talukas, subsidy of Rs 2.64 crore was paid to 105 SHGsinstead of Rs 1.57 crore admissible as per the norms, resulting in excesspayment of Rs 1.07 crore during 2005-2007 (Appendix IX – Page 43).Secretary, AHDD&F agreed (November 2007) to investigate the matter.4.2.2 Deviation from normsIn Yavatmal District, subsidy of Rs 1.86 crore was paid on purchase of 1470animals to 735 beneficiaries at a time between December 2006 andMarch 2007. Similarly, in Buldana and Wardha Districts, subsidy ofRs 2.66 crore was paid on purchase of 2138 animals between a gap of one tofour months for supply to 1069 beneficiaries. This was contrary to theguidelines issued by GOI for providing a gap of six to seven months before thesecond purchase.The Secretary, AHDD&F stated (November 2007) that revised norms withreasonable relaxation to GOI guidelines would be framed in view of localconditions and strictly observed in future.Excess subsidywas paid toAbove PovertyLine SHGsAudit Report (Farmers’ packages) for the year ended 31 March 2007244.3 Micro irrigationFor micro irrigation, Rs 26 crore per year for three years was declared(August 2006) in the package (GOI). The component was applicable to alldistricts in the State for horticulture crops upto 2005-06. Out of Rs 20.67 crorereleased during 2006-07 the total expenditure incurred was Rs 20.62 crore asof March 2007. A few interesting points noticed were as under:(i) Under the component, drip and sprinkler sets were provided at 50 percent subsidised cost. The subsidy was to be shared between Central and StateGovernments in a ratio of 80:20. The scheme was meant for the farmershaving electric connection and source of water for irrigation and to beimplemented through Sub-Divisional Agriculture Officer (SDAO).In 18 test checked talukas, drip irrigation sets costing Rs 10.86 crore wereprovided to 1878 farmers at an average cost of Rs 57,847 per set. Each farmerwas to bear 50 per cent average cost being Rs 28,924, which was a largeamount for a poor farmer.The Principal Secretary, Agriculture stated (November 2007) that the matterwas reported to GOI in September 2006 for increasing the subsidy.ERA survey showed that about two per cent respondents had applied forsprinklers/drip irrigation facilities.(ii) As per the norms prescribed by Commissioner of Agriculture, Pune,the average distance for sowing of cotton of various qualities works out to lessthan 1 metre (m) X 1 m. In 53 cases involving expenditure of Rs 26.81 lakh inAmravati Tahsil and Morshi Tahsil of Amravati District showed that in19 cases the distance of sowing cotton was wrongly shown as 1.5 m X 1.5 m.This resulted in excess payment of subsidy by Rs 1.55 lakh. The PrincipalSecretary, Agriculture (November 2007) agreed to look into theappropriateness of subsidy as prescribed in the guideline.(iii) In Amravati (one case) and Murtizapur taluka (four cases) subsidy ofRs 4.22 lakh was paid on the basis of unsigned form 7/12. In reply(October 2007), the SDAO/Tahsildar provided wrong spot verificationreport/incorrect 7/12 to Audit. Principal Secretary, Agriculture agreed(November 2007) to investigate and take action in the matter.4.3.1 Pending proposalsIn four sub-divisions (Akola, Mehkar, Morshi and Yavatmal) out of 5571proposals received for subsidy of Rs 6.91 crore, 2841 proposals forRs 4.33 crore were pending as of June 2007 for want of funds under thecomponent, despite availability of unspent amount in other components.The Principal Secretary, Agriculture stated (November 2007) that all pendingproposals have now been cleared. The fact remains that there was delay inclearing the proposals.Changes inguidelines notconsidered forpayment ofsubsidyProposalsremainedpending forwant offundsChapter IV – Long term measures254.4 Assured irrigationAssured irrigation was announced as a component of the GOI package forRs 2177 crore to create irrigation potential for 1.60 lakh hectares in six suicideprone districts. Under this component, assistance of Rs 2085.38 crore was tobe provided for eight major, nine medium and 65 minor irrigation projects ofthe State, as grant by the GOI under Accelerated Irrigation Benefit Programme(AIBP). The balance amount of Rs 91.88 crore for 492 minor irrigationprojects of local sector was to be provided as loan from NABARD.4.4.1 Short release of fundsAs per records of Water Resources Department and Vidarbha IrrigationDevelopment Corporation (VIDC), Nagpur no funds for the proposed projectswere received upto February 2007. Position of Central assistance releasedthereafter under AIBP was as below:-(Rupees in crore)Type of project NumberofprojectsproposedunderGOIpackageGrantrequired forproposedprojectsunder GOIPackageduring2006-07Numberof projectsconsideredforassistanceduring2006-07Proportionategrantrequiredduring2006-07GrantactuallyreceivedShortreceipt ofCentralgrantMajor projects 8 489.62 5 273.28 67.48 205.8Medium projects 77 151.84 5 85.51 48.11 37.4Minor irrigationprojects to befunded underAIBP228 85.96 22 85.96 55.89 30.07Total 37 727.42 32 444.75 171.48 273.27Short receipt of Central assistance of Rs 273.27 crore (61 per cent of GOIgrants required) hampered the envisaged projects in the first year of thepackage. It was noticed that the land required for two major projects (LowerWardha and Khadakpurna) in the priority list, was not in possession of theDepartment.The Executive Director, VIDC, Nagpur stated (July 2007) that due to timerequired for obtaining various clearances, the funds of Rs 273.27 crore werenot released by GOI.Thus, creating irrigation potential within three years of declaration of packageappears to be difficult.7 Two medium projects deleted (one due to non-clearance of forest land and other nearingcompletion).8 Forty three Minor irrigation projects were decided to be funded through NABARD.Audit Report (Farmers’ packages) for the year ended 31 March 200726Delay in execution of projectGovernment of India revised (December 2006) the eligibility criteria forfunding. According to the revised criteria if the State Government fails tocomply with the agreed date of completion, the amount released is treated asloan and recovered as per usual terms of recovery of the Central loan. Due toshort release / delayed release possibility of completion of the projects withinthe agreed dates is remote. This presents the risk of Rs 2085.38 crore (56 percent) of total package amount becoming loan instead of grant.Government stated (October 2007) that proposals to get the date of completionof project extended was being submitted to GOI to avoid the possibility ofconversion of grant into loan.4.4.2 Project estimates for NABARD loanIn the package it was proposed that 492 Minor Irrigation projects (LocalSector) estimated (July 2006) to cost Rs 91.88 crore would be executed withthe help of loan from NABARD. Proposals in respect of only 319 MinorIrrigation (MI) projects costing Rs 210 crore (as against Rs 91.88 crore tocover 492 projects) were submitted to NABARD by Rural Development andWater Conservation Department. Of these, 134 MI project proposals costingRs 74.70 crore were sanctioned (July 2007) by NABARD. Remaining185 projects were not sanctioned, as they were not technically feasible andeconomically viable (July 2007).The Principal Secretary, Water Conservation stated (November 2007) that outof 492 schemes, 233 schemes were completed upto March 2007 through Statefunds. Out of remaining 259 schemes 195 would be taken up throughNABARD assistance and balance 64 schemes would be completed throughState fund.The reply was not tenable as NABARD had already rejected (July 2007),Governments proposals for 185 projects on the ground of being technicallyunfeasible and economically unviable. Taking up these projects with Statefunds would amount to risking investment with potential failures.4.5 Seed replacement and cropping intensityOne of the components in GOI package included distribution of seeds tofarmers at a subsidy of 50 per cent subject to a limit of one ha. (of landholding). Instructions for implementation of seed distribution component wereissued by the Commissioner of Agriculture, Pune on 21 August 2006.An amount of Rs 180 crore was allotted for this component for a period ofthree years. National Seeds Corporation Limited (NSC), New Delhi was thenodal agency. However, the seed supply was to be done by Maharashtra StateSeeds Corporation (MSSC) as per demand of Agriculture DevelopmentOfficer (ADO), Zilla Parishad. Each farmer was to be issued a permit by TAOOne hundredeighty five minorirrigationprojects were notsanctioned byNABARD on theground oftechnicalfeasibilityChapter IV – Long term measures27for each season, which could be produced at Taluka Kharedi Vikri Sanghalongwith his share of 50 per cent for purchasing seeds.4.5.1 Funds lying unutilisedAs against Rs 60 crore declared for 2006-07, GOI released Rs 25.46 crore.The VNSSM showed (April 2007) GOI release as Rs 17.50 crore. Theutilisation certificate of MSSC, Akola, however, indicated (July 2007) thattotal value of seed distributed to farmers was Rs 26.57 crore. Excludingfarmers’ share of Rs 13.29 crore in the cost of these seeds, Rs 12.17 crore waslying unutilised with NSC, New Delhi.The Principal Secretary, Agriculture confirmed the facts and stated(November 2007) that amount of utilisation certificate (Rs 26.57 crore) wasmisleading. He also agreed to verify correctness of figures reported by MSSCand NSC.4.5.2 Short supply of seeds due to incorrect estimationDeputy Director, Seed, Pune estimated the district-wise requirement of seedsfor four9 crops as 1.37 lakh quintals (for total 64 talukas), which was muchless compared to the demand of 18 talukas (0.84 lakh quintals) indicatingincorrect estimation. Supply orders were given directly by field officers toMSSC.Test check of 18 talukas showed that as against demand for 0.84 lakh quintals,MSSC, Akola supplied 0.31 lakh quintals (37 per cent) of seeds resulting inshort supply of 0.53 lakh quintals (63 per cent) of seeds to the farmers during2006-07.As per the estimates, seed requirement for 2007-08 and 2008-09 were lessthan the requirement estimated for 2006-07. For major crops like wheat,sunflower, maize etc. no requirement was projected for 2008-09. Theestimates were not realistic as these were made based on the amount allocatedto this component and not based on actual requirement.The Principal Secretary, Agriculture stated (November 2007) that effortswould be made to assess the requirement of seeds realistically.4.6 Agriculture Insurance SchemeTo protect the farmers from the loss of crops due to Natural Calamity or anyother reasons, Government as a special case decided (February 2006) to paysubsidy of 50 to 75 per cent of the premium payable on Crop Insurance. Thiscomponent was allotted Rs 30 crore and Rs 19 crore were released uptoMarch 2007. However, Rs 9.13 crore was lying unspent as of March 2007with Commissioner of Agriculture, Pune.9 Gram, Kardi Safflower, Sunflower, WheatNorequirementof seed forwheat, maize,sunflower, etc.was projectedfor 2008-09Audit Report (Farmers’ packages) for the year ended 31 March 200728Against 4.48 lakh farmers in 15 test checked talukas, only 0.50 lakh farmers(11 per cent) participated in the crop insurance. The taluka-wise participationranged between one per cent (Seloo) to 33 per cent (Chikhaldara). Thus, therewas poor participation of cultivators in insurance scheme.The Principal Secretary, Agriculture agreed (November 2007) to review thecontinued allocation to this component, as the crop insurance was notattracting the farmers.ERA survey showed that only three per cent respondents were covered undercrop insurance scheme.4.7 Vidarbha Panlot MissionTo create availability of water for irrigation to achieve water conservation andto generate agro based self employment through development of watersheds inthe six suicide prone districts, Vidarbha Panlot Mission was included in theGOM package. Government allocated Rs 100 crore for this component and theguidelines were issued in February and September 2006. However, out ofRs 97 crore released by the Government between March 2006 andFebruary 2007, Rs 17.04 crore was spent as of March 2007.The Principal Secretary, Water Conservation stated (November 2007) thatdelay was due to change in the implementing agency from District RuralDevelopment Agency (DRDA) to Agriculture Department and delay inapproval to the relaxation to GOI guidelines, proposed (May-September 2006)by GOM.Failure to start the works even after two years of declaration the GOMpackage (December 2005) would adversely impact the achievementsenvisaged in the package.4.7.1 Delayed issue of guidelinesIn 18 test checked talukas, out of Rs 14.91 crore allocated, Rs 8.53 crore(57 per cent) remained unutilised due to delay in release of funds and issue ofdetailed guidelines (September 2006) of Panlot mission.Principal Secretary, Water Conservation Department agreed (November 2007)to speed up the completion of balance works.Chapter IV – Long term measures294.8 Other Components of the packagesUnder the long term measures there were six other components. Theimplementation was not satisfactory as detailed below:(Rupees in crore)ComponentandimplementingDepartmentsBrief description Amountdeclared/AmountreleasedAmountspent(uptoMarch 2007)Audit findings/ Department’s reply(i) ExtensionServices (GOI)(AgricultureDepartment)This was alreadybeing implementedthrough AgricultureTechnologyManagement Agency(ATMA) from 2005-06 for empoweringthe farmers.3.00/4.283.82 Test check showed that TAO, KaranjaLad had received grant ofRs 5.97 lakh during 2006-07.However, no cash book wasmaintained. Receipt of funds was alsonot entered in the Bank Pass Book ofthe bank account opened for thepurpose.The Principal Secretary,Agriculture stated that TAOconcerned has already beensuspended.(ii)HorticultureDevelopment(GOI)(AgricultureDepartment)The programme wasbeing implemented in23 districts ofMaharashtra includingsix suicide pronedistricts of Vidarbhawith 100 per centsubsidy from GOI(June 2005)225.00 (forthreeyears)/40.9811.72 Out of Rs 40.98 crore released,Rs 11.72 crore only was utilised in2006-07. The amount was given(June 2006) to Maharashtra StateHorticulture Medicinal PlantationBoard and kept out of Governmentaccount without assessing the actualrequirement of funds.The Principal Secretary (Agriculture)stated that a consultant has beenappointed (June 2007) to suggestforward linkage with market forproper utilisation of balance amount.(iii) OrganicFarmingTechnology(OFT) (GOM)(AgricultureDepartment)Various items likeorganic farming,training, vermiculture, etc. wereincluded under thiscomponent30.00/10.309.89 Validation of the OFT was not gotdone from the Agriculture Universityin any of the test checked taluka.Principal Secretary,Agriculture stated (November 2007)that validation requires three to fouryears and the process has already beenstarted.(iv) Jointfarming ofcotton (GOM)(AgricultureDepartment)In order to encouragethe joint cottonfarming, thiscomponent envisagedexecution of aMemorandum ofUnderstanding(MOU) by theFarmers for thepurchase of cotton.- - In three districts as against 9.37 lakhfarmers only 1477 (0.17 per cent)farmers have participated throughseven MOUs executed during 2006-07indicating poor coverage of thefarmers under this component.Principal Secretary,Agriculture stated that coverage andimpact of the component wasimproving.(v) WatershedDevelopment(GOI)AgricultureDepartment)This componentconsists of watersheddevelopmentprogramme and rainwater harvesting, tobe implemented by240.00/60.0035.75 In 18 test checked talukasRs 10.49 crore was spent out ofRs 13.64 crore allocated. Out of 801works taken up for execution, 263were completed and 538 works werein progress.Audit Report (Farmers’ packages) for the year ended 31 March 200730NABARD directly.The third programmecheck dam works wasto be implemented byState AgricultureDepartment with loanfrom NABARD(RIDF).The Principal Secretary,Water Conservation stated that out oftotal 3000 check dams, 2497 werecompleted as of June 2007 andbalance of 503 pertaining to 2006-07and 3000 pertaining to 2007-08 wouldbe completed by June 2008.(vi) Agro basedindustries(GOM) (CooperationDepartment)To encourage theestablishment of agrobased processingindustries in sixdistricts, GOMdecided to providefinancial assistance tothe AgricultureProcessing CooperativeSocieties forraising share capital.No fundallocationunder thiscomponentNotavailableDDRCS Amravati releasedRs 36.30 lakh to two Co-operativeSocieties as 33 per cent share capital.The societies have not started agroprocessingunits as of May 2007. Inother five districts, no proposals werereceived as of May 2007. Thisindicated the lack of response to thecomponent.The Principal Secretary, Cooperationstated (November 2007) thatwork by two Co-operative societieshad already started and five out of 16proposals received were approved bythe Department.4.9 ConclusionFunds for ‘Assistance for increase in production’ were released late; 12,623farmers did not get the benefit despite availability of funds. No priority givento the poorest farmers. A TAO issued cheques to 349 beneficiaries against thetargets of 110; nine cheques were dishonoured for want of cash in bank. SelfHelf Groups were paid subsidies in excess of the admissible norms. Forpurchase of agricultural implements under ‘Micro irrigation’, a farmer’s sharewas too large for a poor farmer. Though proposals for 185 minor irrigationprojects were rejected by NABARD on the ground of being technicallyunfeasible and economically unviable those were taken up for execution.Incorrect estimation of requirement led to short supply of 53,000 quintals ofseeds (63 per cent). Funds for Vidarbha Panlot Mission were underutilized.4.10 Recommendations• Higher rate of subsidy for small and marginal farmers could beconsidered to extend envisaged benefits to larger number of farmers.• Completion of projects under AIBP and from NABARD funds shouldbe monitored closely to avoid treatment of grant as loan by GOI.• Crop insurance coverage could be extended to all crops includinghorticulture.Government accepted the above recommendations during exit conference(November 2007).=====================================Appendices33APPENDIX I(Reference: Paragraph 1.1 and 2.2)Components under package declared by GOM and GOI(Rupees in crore)Sr. No. Components under package declared by GOM Amount1. Immediate relief -2. Rescheduling of loanInterest more than principle should not be charged for Cooperative loanLoan disbursement to Self Help Groups of farmersRestructuring of credit disbursement procedure225.003. Regulation of loan disbursed by money lenders Nil4. Agriculture Insurance scheme 30.005. Financial assistance to farmers for increase in production 150.006. Agriculture Allied Activities 30.007. Agro Based Industries Nil8. Joint Farming of Cotton Nil9. Community Marriages 6.0010. Refund of Capital Formation Fund 370.0011. Compensation to Cotton Growing Farmers 134.0012. Organic Farming Technology 30.0013. Vidarbha Panlot Mission 100.0014. Help Line for Farmers NilTOTAL 1075.00Components under package declared by GOI Amount1. Ex-gratia assistance from PMNRF -2. Debt Relief to Farmers and Credit Flow -3. Interest Waiver 712.004. Assured irrigation facilities 2177.005. Seed Replacement and Cropping Intensity 180.006. Watershed Development 240.007. Horticulture Development 225.008. Micro Irrigation 78.009. Extension Services 3.0010. Subsidiary income 135.00TOTAL 3750.00Note:- Sr.No. 4, 10, 11 & 12 of GOM package (total: Rs 564 crore) and no. 8, 9 and10 of GOI package (total: Rs 306 crore) were for entire State.Audit Report (Farmers’ packages) for the year ended 31 March 200734APPENDIX II(Reference: Paragraph 1.2)Implementing departmentsSr.No.ImplementingDepartmentsImplementingDistrict/Taluka levelofficesComponents1. Revenue and ForestsDepartment (Relief &Rehabilitation Wing)District Collectors &Tahsildars(i) Immediate relief(ii) Help Line(iii)Ex-gratia assistance from PMNRF2. Co-operation &Textile Department(i) RBI/NABARD/(ii) DDRCS/Nationalised and CooperativeBanks(iii) Cotton Federation(i) Rescheduling of loan, (ii)Regulation of loan disbursed bymoney lenders,(iii) Interest more than principleshould not be charged for Cooperativeloan,(iv) Loan disbursement to Self HelpGroups of farmers(v) Restructuring of creditdisbursement procedure3. AgriculturedepartmentAgriculture InsuranceCompany, TalukaAgriculture Officer,District Superintending.Agriculture Officer-(i) Agriculture Insurance scheme, (ii)Financial assistance to farmers forincrease in production,(iii) Agro Based Industries,(iv) Joint/Contract Farming of Cotton,(v) Compensation to Cotton GrowingFarmers,(vi) Organic Farming Technology,(vii) Vidarbha Panlot Mission,(viii) Seed Replacement andCropping Intensity,(ix) Watershed Development,(x) Horticulture Development,(xi) Micro Irrigation,(xii) Extension Services4. Animal HusbandryDepartmentMaharashtra Live StockDevelopment Board(MLDB), Akola,District & Taluka levelOffices of AnimalHusbandry Deptt.Agriculture Allied Activities5. Women & ChildWelfare Deptt.District Women &Child Welfare OfficerCommunity Marriages6. Water ResourcesDepartmentVidarbha IrrigationDevelopmentCorporation (VIDC)Assured irrigation facilities7. Water ConservationDepartmentTaluka AgricultureOfficer, Chief Engineer(Local Sector)Construction of check dams, MinorIrrigation (Local Sector)Appendices35APPENDIX III(Reference: Paragraph 1.5 & 2.1)Special Package (GOM)(Rupees in crore)Sr.No.Name of Component Grantreleased(sixdistricts)as perVNSSMExpenditureas of31/03/2007(sixdistricts) asper VNSSMWhethercomponentwas forentireStateGrantentireState asperVNSSMExpenditureentire Stateas perVNSSM1. Immediate relief 11.32 11.32 No - -2 Rescheduling of loan;Interest more thanprinciple should not becharged for Cooperativeloan; Loandisbursement to SelfHelp Groups offarmers; Restructuringof credit disbursementprocedure.240.98 239.12 No - -3 Agriculture Insurancescheme19.00* 9.87 Yes NA NA4 Financial assistance tofarmers for increase inproduction50.20 49.99 No - -5 Agricultural alliedactivities31.00 23.22 No - -6 Community Marriage 14.23 9.22 No - -7 Refund of CapitalFormation Fund405.15* 396.59 Yes 875.53 704.488 Compensation to cottongrowing farmers131.72* 130.12 Yes 299.49 265.099 Organic FarmingTechnology10.30* 9.15 Yes 26.44 25.3910 Vidarbha PanlotMission97.00 17.04 No - -TOTAL 1010.90 895.64 1201.46 994.96* Component implemented in entire StateNote:- Expenditure in six districts : GOM package Rs 895.64 croreGOI package Rs 1532.78 croreRs 2428.42 croreLess amount repeated in GOM package Rs 239.12 croreNet Rs 2189.30 croreAudit Report (Farmers’ packages) for the year ended 31 March 200736APPENDIX IV(Reference paragraph 1.5)Details of expenditure covered under auditGovernment of Maharashtra(I) District Level Component (Rupees in crore)1. Capital Formation Fund 396.592. Community Marriages 4.433. Crop Insurance 9.874. Allied Activities 9.73(II) Taluka Level Component1. Cotton Compensation 36.872. Organic Farming 1.943. Immediate Relief 3.104. Agriculture Inputs (60,000 farmers) 13.755. Vidarbha Panlot Mission 17.04Government of India(I) District Level Component1. Interest Waiver 824.992. Assured Irrigation -3. Seed supply 13.204. National Horticulture Mission 11.715. Micro Irrigation 20.626. Allied Activities 4.44(II) Taluka Level Component1. Watershed Development Programme 13.642. PMNRF 0.883. ATMA 0.66GRAND TOTAL 1383.46Appendices37APPENDIX V(Paragraph 1.5)Sampling Plan for survey of the land holders conducted by ERAMethodologyData pertaining to 7/12 of the farmers for all suicide prone districts ofVidarbha region was obtained from the Settlement Commissioner andSuperintendent of Land Records, Maharashtra State, Pune and then 12 Talukasnamely Amravati, Anjangaon, Chandur Bazar, Morshi, Deulgaonraja, JalgaonJamod, Malkapur, Mehkar, Motala, Karanja, Ghatanji, Pusad were selectedrandomly out of 64 Talukas in these six districts. For the process of sampling,village was considered as one unit. Villages were selected by stratifying theminto two categories.Category-1: Twenty villages were selected for Census on the basis ofbenefits given to the farmers under the 3 package components namelyImmediate Relief, Prime Minister’s National Relief Fund and CommunityMarriages.Category-2: For survey, twenty-five percent villages from the 12 Talukawere extracted as sample by Probability Proportionate to Size (PPS) Method.The sample interval for each was derived from the control total of theremaining villages (i.e. villages which remained after deleting the names ofCensus villages selected in Category-1).In this category, for survey of villages, twenty percent land holders wereselected from each strata after stratifying the land holders into following 3stratas. (Sampling done by the survey firm.)Stratum 1 – Land holders with less than 2 hectares of land.Stratum 2 – Land holders with 2 to 6 hectares of land.Stratum 3 – Land holders with more than 6 hectares of land.On the basis of issues identified, questionnaires in Marathi were designed andcanvassed. 41663 land holders were surveyed by the firm M/s EmpiricalResearch Agency Private Limited and Gomukh Environmental Trust forSustainable Development, Pune.Audit Report (Farmers’ packages) for the year ended 31 March 200738APPENDIX VI(Paragraph 1.5)Executive Summary of Survey Results of Farmers’ PackageIn all 383 villages were covered in the survey. Twenty villages were covered onCensus basis and 363 villages were covered on sample basis. Total farmers covered inthe survey were 41,663. Out of them 8697 farmers were selected in the sample butwere not residents of that village. Hence, the number of resident farmers contactedwas 32,966. The responses of these farmers were further analyzed to get outputformats, non-resident farmers were not considered while analyzing the data. Districtwisecoverage of villages and farmers/khatedars is presented in the following table:District No. of villages No. of nonresidentfarmersNo. of farmersWashim 39 1016 3051Yavatmal 77 1476 4500Amravati 136 4104 13753Buldhana 131 2101 11662Total 383 8697 32966Land holding patternMajority of farmers (71 per cent) owned land up to 2 ha. The second largest groupwas of those farmers who held land in range of 2 to 6 ha. Whereas, those reporting,ownership of land more than 6 ha. were approximately 4 per cent in the total sample.Except Yavatmal District a similar trend is evident in all other districts. In Yavatmalhowever, those owning land up to 2 ha. were 54 per cent. Those reporting landholding in range of 2 to 6 ha. were 40 per cent and approximately six per centreported land holding more than 6 ha.Source of irrigationWells are reported as major source of irrigation. In overall sample 77 per cent offarmers reporting irrigation depend on well water as a source of irrigation. However,in Washim and Yavatmal district around 56- to 58 per cent reported well as source ofirrigation. In Amravati and Buldhana 84 and 80 per cent farmers respectively,reported well as source of irrigation. A considerable percentage of farmers reportingirrigation, depended on river as source of irrigation in Washim and Yavatmaldistrict.(around 20 per cent) , and 16 per cent farmers from Washim district reportedbore wells as source of irrigation. Average irrigated land is reported at 1.50 ha. inoverall sample. It is maximum in Washim at 2.17 ha. and is minimum in Buldhana at1.00 ha.Survey in 2006Only 8 per cent farmers confirmed the visit of any government official in the year2006. This percentage was minimum in Washim at just 3 per cent. Some six per centin total sample did not remember about such visit. Whereas, 85 per cent in totalsample stated that they were not visited by any government official. This percentageis highest in Washim at 95 per cent.About GOI / GOM PackageIn the total sample 40 per cent farmers were aware about the GOI / GOM Package.This awareness was found maximum in Washim district at 54 per cent and it wasminimum in Amravati district at 32 per cent. Some 22 per cent farmers had heardabout the package. Those who had heard about the package were maximum at 33 percent in Washim and Buldhana districts and minimum at 8 per cent in AmravatiAppendices39district. Those who did not know about the package were 36 per cent in overallsample. This group was maximum in Amravati at 57 per cent.Forty-nine per cent farmers were aware about the advantages of the packages. Thispercentage was highest in Yavatmal at 74 per cent and minimum in Washim andBuldhana at 31 per cent. Village meetings was the source of information in case ofmaximum farmers (40 per cent), whereas, other sources were reported by 34 per centfarmers. This included discussions with fellow farmers etc.Albeit availing the information about the packages declared by the governmentalmost half of the farmers did not approach any body to understand as to how theycould be benefited by these packages. Only 5 per cent of those who were aware aboutthe package could avail the desired benefits from these packages.About loans from money lendersIn the overall sample 75 per cent farmers were not aware about the relief from theunregistered money lenders. Only 1.30 per cent farmers reported taking loans fromunregistered money lenders.Bank LoansFifty five per cent farmers took loans from banks in overall sample. This percentageis reported highest in Washim and Yavatmal districts at around 70 per cent. Almost70 per cent loans were taken in the period of three years i.e. 2004-06. Only 25 percent farmers were aware that the interest upto 30-06-06 on their loans was waived.Farmers applying for new loans were 25 per cent. In 72 per cent cases the loan wassanction within 1 to 3 months. 67 per cent farmers stated that mortgage was necessaryto take new loan. Moreover, those who were asked to repay the old dues whilesanctioning new loans were 44 per cent. Some 8 per cent farmers reported that thefees were charged while processing the new loans.Most of the farmers among those taking loans, had taken only one loan during theperiod 2000 to 2005. (83 per cent). Another 11 per cent had taken loan two timesduring this period. Those taking loan for three times during this period were 5 percent and only one per cent had taken loan for 4 times during this period.Refund of Capital Formation FundIn the total sample 80 per cent farmers reported growing cotton during the period of1974 to 1993. About 65 per cent of the cotton growers received the dues on accountof Capital Formation Fund. More or less the percentage of these farmers is the samein all the districts.In the year 2005, 63 per cent farmers reported cultivating cotton. Average yield peracre was reported at less than half quintal per acre. The expected yield per acre wasreported at about 2 quintal per acre. In the year 2006, same percentage of farmerscultivated cotton. The average yield they could get was about 2 and half quintal peracre and the yield they expected this year was more than 4 and half quintal per acre.Crop insurance was reported by just 3 per cent farmers in the total sample. Ascompared to other districts in Yavatmal the figure of those going for crop insurance ishigher at 14 per cent.Forty six per cent farmers reported the receipt of ‘lalya’ (a disease resulting inreddening of cotton) compensation. It is reported maximum in Yavatmal at 70 percent and minimum in Amravati at 34 per cent.Audit Report (Farmers’ packages) for the year ended 31 March 200740Supply of Agricultural inputsSixty three per cent farmers were aware about the supply of inputs at subsidized rates.Major source of information was the village level officers like Gram sevaks andTalathis in case of about 44 per cent farmers. Delay in the supply of inputs wasreported by 28 per cent farmers. Out of them almost 94 per cent were of the opinionthat the delay was not due to late payment of contribution amount by the farmers. 60per cent of those who received inputs felt that these inputs were profitable whereas,only in case of 2 per cent they felt that they have incurred losses due to the supply ofthese inputs. Those who thought that neither they got profit nor they incurred losseswere 38 per cent.Sprinkler and Drip irrigation facilitiesHardly 2 per cent farmers reported applying for the above mentioned irrigationfacilities. The percentage is more or less the same in all the 4 districts.Community marriage schemeThis is also a component which has not succeeded in drawing attention of thefarmers. It is reported that less than one per cent of the farmers applied forparticipation under this scheme. The percentage is slightly higher at 2 per cent inYavatmal district. However, in case of almost 38 per cent farmers they did not thinkof this scheme because they did not have marriageable daughter. Out of those whoapplied, 30 per cent farmers reported having married their daughters in communitymarriage events.Suicide casesIn the overall sample only 0.65 per cent farmers reported suicide cases in the family.It was maximum at 0.9 per cent in Yavatmal and minimum at 0.5 per cent inBuldhana. 60 per cent of those reporting suicide felt that no proper action was takenby concerned authorities after the incident of suicide. 46 per cent claimed that theydid not get any assistance. 23 per cent got the assistance during the time span of 1 to3 months. Only 4 per cent claimed that they got assistance within a month.Health and EducationOverall 18 per cent farmers were aware about the free telephone service (helpline)started by the government. This awareness was maximum in Yavatmal at 25 per centand minimum in Washim at 9 per cent.Assistance requiredForty four per cent farmers demanded assistance for children’s education, 35 per centneeded assistance to practice organic farming, another 34 per cent asked forassistance for the treatment of sickness in family. Assistance for sprinkler andelectricity for pumps was the demand of 32 and 33 per cent respectively.Comparatively, negligible percentage of farmers has asked for assistance to starthorticulture crops (1 per cent). Although, these demands were put forth by thefarmers, most of theme. 87 per cent had not taken any action in order to get thedesired assistance. Training was attended by only 1 per cent farmers.LivestockThe survey indicated that less than 1 per cent farmers, received assistance in the formof livestock. 95 per cent farmers could not get benefit form vaccination serviceprovided by government. Moreover, 99 per cent farmers did not get the milk cansprovided by the government.Appendices41APPENDIX VII(Reference: Paragraph 2.1)Special Rehabilitation Package (GOI)(Rupees in crore)Grant released (sixdistricts) as perVNSSMSr.NoName ofComponentCentral StateExpenditureas of31/03/2007(six districts)As perVNSSMWhethercomponentwas forentireStateGrantentireStateExpenditureentire State1. 2. 3. 4. 5. 6. 7. 8.1 Ex-gratiaassistancefrom PMNRF3.00 1.80 4.26 No - -2 Debt Reliefto Farmers,Credit Flow,InterestWaiver125.00 356.00 824.99 No - -3 Assuredirrigationfacilities122.50 882.00 613.70 No - -4 SeedReplacementand CroppingIntensity17.50 - 13.20 No - -5 WatershedDevelopment- 60.00 33.35 No - -6 HorticultureDevelopment*14.48 - 11.71 Yes 82.60 76.567 MicroIrrigation *16.54 4.13 20.62 Yes 109.93 98.828 ExtensionServices *3.83 0.44 3.81 Yes 6.84 5.909 Subsidiaryincome23.11 2.25 7.14 No - -325.96 1306.62 1532.78 199.37 181.28* Component implemented in entire StateAudit Report (Farmers’ packages) for the year ended 31 March 200742APPENDIX VIII(Paragraph 3.4)Excess area under cotton cultivation(Rupees in lakh)Area of cotton cultivation (in ha)as reported byExcess of areaassessed forpayment ofcompensation overthe area shown inCCR in the TalukaDistrictMRSAC DSAO &ADO(ZP)(%increase)asreportedthroughCCRCollector(throughTalathi)(%increase)Amountpaid forareaassessedinexcessof theareashownin theCCRTaluka(inhectares)AmountAkola 170120 197501(16%)213098(25%)156.02 Murtizapur* -- --NandgaonKhandeshwar9861.00 98.93ChandurBazar4498.00 44.98Morshi 2790.32 27.90Chikhaldara 825.94 8.26AnjangaonSurji*-- --Amravati 212790 241051(13%)254400(20%)212.48Amravati* -- --Lonar 449.45 4.50Motala 30488.00 304.88DeulgaonRaja1961.00 23.13Malkapur 3866.89 38.66JalgaonJamod8129.77 81.30Buldana 190770 209630(10%)278963(46%)693.33Mehkar* -- --Wardha 105460 96632 (-8%)137163.52(30%) 405.31 Seloo 4571.63 45.72Washim 457.96 4.57 Washim 56880 58591(3%)82400(45%) 238.09 Karanja Lad 17030.76 170.31Ghatanji 10259.00 102.59 Yeotmal 313200 320494(2%)349200(11%) 285.06 Pusad* -- --TOTAL 1049220 1123899 1315224.50 95189.72 955.73* Area of cotton cultivation as per Crop Cultivation Report (CCR) was more than thearea for which compensation was paid.Appendices43APPENDIX IX(Reference Paragraph 4.2.1)Excess payment of subsidy(Rupees in lakh)Sr.No.District TALUKA No. ofAPLgroupsProjectccstSubsidyactuallypaidSubsidypayable(Rs 1.50lakh perproject)Excesssubsidy1. Akola Murtizapur 15 45.60 34.21 22.50 11.712. Amravati 10 38.15 28.61 15.00 13.613. Morshi 06 22.70 17.02 9.00 8.024. ChandurBazar10 41.30 30.98 15.00 15.985. Chikhaldara 03 10.20 7.65 4.50 3.156.AmravatiNandgaonKhandeshwar06 23.10 17.32 9.00 8.327. Motala 07 22.50 16.88 10.50 6.388. Lonar 07 22.50 16.87 10.50 6.379. Malkapur 10 33.50 24.75 15.00 9.7510. Mehkar 07 23.25 17.44 10.50 6.9411.BuldhanaJalgaonJamod06 16.25 12.19 9.00 3.1912 Ghatanji 09 30.00 22.50 13.50 9.0013.YavatmalPusad 09 23.61 17.70 13.50 4.20105 352.66 264.12 157.50 106.62